Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Medtronic Stock Rose 12.6% in 2018

By Cory Renauer - Updated Apr 17, 2019 at 11:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Emerging market growth and new products on the way suggest years of steady dividend raises ahead.

What happened

Shares of Medtronic (MDT 0.44%), the world's largest medical device manufacturer, gained 12.6% in 2018, according to data from S&P Global Market Intelligence. Strong growth from emerging markets and an encouraging new product lineup helped this Dividend Aristocrat outperform.

Check out the latest Medtronic earnings call transcript.

So what 

During the fiscal second quarter that ended on Oct. 26, 2018, top-line sales from emerging markets grew 7.3% as reported, or 13.5% at constant currency rates. In the U.S., revenue rose 8.3%, which allowed the company to overcome sagging sales in non-U.S. developed markets, which only grew by 1.8% as reported.

Man in a suit drawing an upward-sloping chart with his fingers.

Image source: Getty Images.

Medtronic's operations generated $4.8 billion in free cash flow over the past year. That gives the company plenty of breathing room to raise dividend payments and execute acquisitions to help solidify its position in key markets. For example, the company entered the robot-assisted surgery market last year. Medtronic is currently launching a system that helps surgeons fix bad backs with its line of spinal repair products.

Now what

In the first half of 2019, Medtronic will probably launch a next-generation stent for stroke patients that will help the company maintain its lead in the cardiovascular space. 

For international patients with diabetes, the MiniMed system that's gaining popularity in the U.S. is launching in countries across the EU. The closed-loop blood-sugar monitor and insulin pump drove U.S. diabetes sales 31% higher during the six months ended Oct. 26, 2018, compared with the same period a year earlier.

Medtronic might not be the most exciting stock, but its diverse product portfolio is set up to deliver years of steady dividend growth.

Cory Renauer owns shares of Medtronic. The Motley Fool owns shares of Medtronic. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Medtronic plc Stock Quote
Medtronic plc
MDT
$94.45 (0.44%) $0.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
389%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.