What happened

Shares of Medtronic (NYSE:MDT), 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.