Medtronic stock has been a topic of discussion among investors these days. This giant of the medical device industry has caught the attention of long-term investors with its smart strategies and future plans. Even though Medtronic stock has underperformed the market in the last few years, the company recent progress and strong financial position make it an attractive investment option. If you are wondering whether it would be right to invest in Medtronic stock, let know three big reasons that make it special.
Separation of diabetes care unit and its impact
Medtronic has recently decided to separate its diabetes care unit, which will soon enter the market as an independent company. This news is a big step for Medtronic stock. The diabetes care unit contributes eight percent of the company total income, but its contribution to profits is only four percent. This means that this business has been less profitable for the company. By separating this unit, Medtronic will now focus on its segments that generate more profit, such as products related to cardiology and neuroscience. This strategy can make Medtronic stock stronger, especially in today times, when there is a risk of increasing tariffs due to trade policies. This move by the company gives investors confidence that Medtronic is ready to deal with future challenges.
Medtronic strong move in robotic surgery
The real strength of Medtronic stock is its progress in robotic-assisted surgery (RAS). The company Hugo system, which is designed to make surgery easier and more accurate, is already being used in many countries. However, it is yet to get regulatory approval in the US. Recently, Medtronic has completed clinical trials for urologic surgery in the US and has applied for approval from the FDA. The robotic surgery market is still in its early stages, and only five percent of surgeries are being done with this technology. As the number of elderly people in the world population is increasing, the demand for this type of surgery will also increase. Medtronic Hugo system could bring about a big change in this area, leading to a long-term increase in the price of Medtronic stock and the company earnings. This is a great opportunity for investors.
Strong dividend legacy
Medtronic stock is special for those who are looking for stable income. The company has continuously increased its dividend for the last 48 years, which could soon give it the status of Dividend King. This achievement reflects Medtronic strong financial position and its deep roots in the healthcare industry. The current forward P/E ratio of Medtronic stock is 15.9x, which is quite attractive compared to its competitors. This means that investors are getting an opportunity to invest in a strong company at a low price. Whether you are looking for dividends or capital appreciation, Medtronic stock is a reliable option in both cases.
Medtronic stock may not be at the forefront of hotly debated areas like artificial intelligence, but the company is using this technology in its products, which could boost its profits in the future. The separation of the diabetes unit, investments in robotic surgery, and a strong dividend legacy make Medtronic stock an investment that can deliver stable returns over the long term. If you are looking for a reliable and growing company to invest in the US, Medtronic stock deserves a place in your portfolio.