Medtronic PLC.

On my other blog I am today writing about updating my index and dividend spreadsheets learn more...

Sound bite for Twitter and StockTwits is: US Health Care dividend growth stock. Dividends have grown strongly lately and analysts seem to expect more growth in the future. They have increased dividends every year for the past 25 years. See my spreadsheet on Medtronic PLC.

I do not own this stock of Medtronic Inc. (NYSE-MDT). In 2009 I was looking for a good US stock for my US$ account. I had heard good things about this stock and also it is in Health Care sector which is a weak sector in Canada. This is one of the few US stocks that I follow. Their financial year is April 30 each year.

The first thing to mention is that this company changed its name from Medtronic Inc. to Medtronic PLC effective January 2015. This was after buying Covidien PLC of Ireland and moving to Ireland. US companies are doing this for tax reasons. US taxes for companies are around the highest in the world. If they bring in profits made outside the US, they have to pay taxes on this money between the taxes they paid on it and the US rate of 35%. All currency in this report is in US$ unless otherwise stated.

I have records on this company going back to 2002 and they have increased their dividends every year since then. That is for 25 years. The dividend yield is moderate and the dividend increases are moderate. The current is 2.06% based on dividends of $1.52 and a stock price of $73.69. The dividends have grown at 8.3% and 13.6% per year over the past 5 and 10 years.

The recent dividend yields have been a lot higher than they have been historically. The 5 year median dividend yield is 2.46%. The historical median dividend yield is just 0.72%. The historical high is around 3%. Yields have been higher since around 2009. They are also paying out a higher proportion of earnings and cash flows.

The Dividend Payout Ratios are generally good. The DPR for 2014 for EPS is 51% and for CFPS is 52%. The 5 year median DPRs for EPS is 31% and for CFPS is 23%. Analysts expect these ratios to be around 47% for EPS and 30% for CFPS in 2016. The last dividend increase was in 2015 and it was for 24.6%.

The total return for this stock to date is 17.10% and 4.21% per year over the past 5 and 10 years. The portion of this total return attributable to dividends is 2.38% and 1.71% per year. The portion of this total return attributable to capital gain is 14.72% and 2.50% per year.

What is of interest to Canadians is that if you had invested in this stock it is only in the last 2 five year periods where you would have made money. I have looked at total Canadian returns for this stock for each 5 year period from 2002 to the present time. The 5 year periods from 2005 to 2013 have total loss from 10% to 0.6% per year. For example, for the 5 year period from 2000 to 2005 there was a total return of a negative 2.8% per year. For the last two 5 year periods ending in 2014 and 2015, the total returns are 13.2% and 17.4% per year, respectively.

Outstanding shares have increased by 5.3% and 1.6% per year over the past 5 and 10 years. Shares have increased due to Stock Options and Share Issues and decreased due to Buy Backs. Shares increased some 42% in 2015 mainly due to purchase of Covidien PLC.

The financial year ending in April 30, 2015 was not a particularly good year for this company as earnings and cash flow was down. However, analysts expect the next financial year to be better. Revenues growth is nonexistent to moderate. Earnings growth is nonexistent to moderate. Cash Flow growth is nonexistent to low.

Revenue has grown by 5.1% and 7.3% per year over the past 5 and 10 years. Revenue per Share is down by 0.2% and up by 5.5% per year over the past 5 and 10 years. Analysts expect good growth in 2016 at around 43%. If you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, Revenue is up by 14.8%.

EPS is down by 2.9% and up by 5% per year over the past 5 and 10 years. Analysts expect EPS to growth by 34% for the next financial period. However, if you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, EPS is down by 12.5%. It is not going in the right direction.

Cash Flow is down by 3% and up by 1.6% per year over the past 5 and 10 years. CFPS is down by 7.9% and up by 0% per year over the past 5 and 10 years. Analysts expect Cash Flow to increase by 45% in 2016 financial year. If you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, Cash Flow is up by 10.3%.

The Return on Equity for the 2015 financial year was 5% and the 5 year median is 18.6%. The ROE was below 10% 2 years in the past 5 years and in 3 years in the past 10 years. The ROE on comprehensive income for the 2015 financial year was 3.9%. However, the 5 year median ROE was 18.5%.

Analysts expect Net Income to increase by around 82% in 2016. However, if you compare the 12 month period to the end of April 2015 to the 12 month period to the end of the first quarter of 2016, Net Income is down by 1.9%. It is not going in the right direction. Also, the first quarterly results do not seem to include comprehensive income.

Debt ratios are generally quite good. The Liquidity Ratio for 2015 was 3.36. This ratio has been quite high since 2013. The Debt Ratio is 2.00. The Leverage and Debt/Equity Ratios for 2015 were 2.00 and 1.00.

This is the first of two parts. The second part will be posted on Tuesday, October 27, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Medtronic is the world's leading medical technology company, pioneering device-based therapies that restore health, extend life and alleviate pain. Primary products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, among others. Medtronic operates its business in one reportable segment, that of manufacturing and selling device-based medical therapies. The company does business in more than 120 countries. The company's product lines include cardiac rhythm management, neurological and spinal, vascular and cardiac surgery. Its web site is here Medtronic PLC.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.