The terms “dividend” and “healthcare stock” usually aren’t mentioned in the same sentence. They’re almost unavoidable together when talking about Medtronic (NYSE: MDT), however. The company is not only a regular dividend payer, but also a frequent raiser, having lifted its distribution for 48 years in a row. But this is far from its only advantage.

Medtronic offers a wide range of products for treating various and sundry medical conditions. This makes the company’s stock highly recession-resistant, as spending on essential procedures and care is often non-negotiable for people with health issues.

Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »

The fundamentals tell the tale. Since 2000, Medtronic has seen declines in annual revenue only twice. And these weren’t very dramatic — the fiscal year 2020 fall of 5.4% was due to the onset of the COVID pandemic (in which medical facilities prioritized care for the disease), while unfavorable currency movements and supply chain issues pushed 2023 revenue down by 1.4%.

Over the years, management has been adept at growing the company into a major supplier to the most significant healthcare segments. All four of its current business units — cardiovascular, medical-surgical, neuroscience, and diabetes — generate strong revenue streams (although the relatively low-margin diabetes unit will soon be spun off).

In terms of profitability, Medtronic’s bottom line can be somewhat up-and-down (due to factors like the company’s pricey — almost $43 billion — acquisition of peer medical device company Covidien in 2015). Nevertheless, it has posted annual net income for more than 60 years in a row. That kind of record would be the envy of any business, large or small, in any industry.

What decidedly isn’t up-and-down is the company’s dividend. That 48-year raise streak is hard to beat, particularly in a sector that isn’t exactly renowned for remunerating shareholders. In addition to being consistently on the rise, the distribution is generous — it currently yields nearly 3%, more than double the average of all S&P 500 component stocks.

Given Medtronic’s ability to grow the top line and fund an ever-rising dividend, it might be surprising to learn that its stock has underperformed the benchmark S&P 500 index for years.