Medtronic (NYSE:MDT), the behemoth medical device manufacturer with 90,000 employees around the globe, receives high marks for its business operations and its ever-growing dividend. Don't interpret that as a high dividend though. In fact, it currently yields only around 2%.

Through a tapestry of business units focused on everything from diabetes and minimally invasive therapies to pacemakers and much, much more, Medtronic continues to be a case study on running a successful global business.

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Medtronic posts another successful quarter

Medtronic generated nearly $7.5 billion in revenue in the most recent quarter, a 1.5% improvement over the same period the year before. Due to its global footprint, currency fluctuations can cause sales to appear better or worse. Adjusted for currency changes, its most recent revenue increased 3.5% over the same quarter last year.

Cash flow from operations was $1.5 billion. After deducting for capital expenditures, the free cash flows for the first quarter of the 2020 fiscal year was $1.2 billion. Dividends get paid out of a company's available cash. Therefore, healthy free cash flow ensures the ability to pay the dividend.

Medtronic aims to return 50% of free cash flow

On the earnings conference call, Medtronic's Chief Financial Officer Karen Parkhill highlighted a commitment to "returning a minimum of 50% of our annual free cash flow to our shareholders in the form of dividends and net share purchases." Medtronic returned $800 million or 70% of its free cash flow in the last quarter.

Prospects for the business remain optimistic. Emerging markets stand out as one of the highest growth areas although today it only generates 16% of revenues. Multiple new products across several business units are expected to launch in 2020. Medtronic's CEO Omar Ishrak said, "we expect our growth rate to accelerate over the course of FY20, with the second half growing faster than the first. . . and bring multiple new products to market over the next several quarters."

Medtronic provided guidance of a 4% increase in revenues for 2020, implying total revenues in the range of $31.4 billion to $31.6 billion. For investors, that should translate into earnings per share of $5.54 to $5.60.

Medtronic increased its dividend, again

Medtronic increased the annual dividend by 8% in June so investors now can expect $2.16 annually. Parkhill said the "dividend has grown 77% over the past five years."

Medtronic is one of those autopilot-type stocks for buy-and-hold investors. Buy it, put it away, and look at it ten years from now. If you bought the stock 10 years ago, your investment would have tripled.

Institutional investors favor the stock. Nearly 85% of the available shares are in the hands of mutual funds, pensions, and other investment funds. Less than 1% of the shares are short, meaning those investors are betting against the company's success. If you own a large-cap or broad market stock fund or ETF, chances are high that you already own Medtronic.

Investors with low tolerance for risk should fall in love with Medtronic. It is not just a good dividend stock, it's a great stock overall. Powered by consistent and diversified revenue streams from established business units, new product innovation should sustain Medtronic into the future.

Income seeking investors wanting higher dividend yields probably should look elsewhere. As a short term play, owning the S&P 500 through an index fund probably makes more sense. Owning Medtronic stock probably makes more sense for investors who can hold it for several years to fully capitalize on the return of free cash flow.