Medtronic (MDT 0.77%) is on a roll in more than one way. The medical device giant is beating the S&P 500 since the start of 2023. The company also continues to strengthen its portfolios, winning more than 150 product clearances over the past year. And Medtronic is making big moves into the exciting field of Artificial Intelligence (AI).

At the same time, Medtronic has grown its dividend over time, making it a top dividend stock to own. Still, the company has faced economic headwinds -- and isn't growing in leaps and bounds. Is Medtronic stock a buy now? Let's find out.

Increasing net income and revenue

First, a bit of background on Medtronic. The company sells devices globally in the areas of cardiovascular, neuroscience, diabetes, and surgery. Over time, Medtronic has increased net income, revenue, and free cash flow.

MDT Net Income (Annual) Chart

MDT Net Income (Annual) data by YCharts

Challenges like negative currency impact and higher inflation have weighed on Medtronic. But medical device companies -- and healthcare players in general -- are less vulnerable to difficult economies than companies in other industries. Hospitals still need to purchase devices and carry out various procedures. So, investors can be pretty certain Medtronic's earnings will hold up no matter what the economy is doing.

Let's look at what's going on at Medtronic now. The company is making efforts to become more efficient by streamlining its portfolio of products. For example, it plans to spin off its patient monitoring and respiratory interventions businesses in the second half of the next fiscal year -- that implies later this calendar year or early next year. A spinoff of these slower growing businesses should lift Medtronic's overall growth.

At the same time, Medtronic has made acquisitions that could boost growth in the future. An example is Intersect ENT, which reinforces Medtronics' ear, nose, and throat business.

Becoming a big player in AI

Medtronic also is on its way to becoming a big player in AI Healthcare. The company uses AI models in areas such as spine surgery and gastroenterology. The company's spine analyzer technology helps surgeons predict possible outcomes for each individual patient -- so they are better prepared to treat each patient.

And in a new deal with Nvidia, Medtronic will use that company's technology to bolster its GI Genius device for endoscopy. Eventually, third party developers will even be able to build AI models that may be incorporated in the GI Genius.

GlobalData says Medtronic is one of the top 5 companies in the AI Healthcare space. This clearly could help certain Medtronic products to dominate their markets.

Finally, let's consider how Medtronic has performed so far in the current tough economic environment. In the most recent quarter, the company's revenue rose a bit more than 4% on an organic basis to $7.7 billion, beating expectations. Though non-GAAP diluted earnings per share fell, it, too, surpassed expectations. Medtronic even increased fiscal full-year guidance for those two metrics.

That said, we shouldn't expect major growth from Medtronic overnight. The company still expects rising inflation to increase its cost of goods sold in the coming year. And currency exchanges may hurt earnings per share. Meanwhile, Medtronic will continue to heavily invest in research and development -- this too will add pressure to earnings in the near term. The company aims for R&D growth at or higher than revenue growth. But the R&D spend is positive because it should result in more products, therefore more revenue over time.

On the way to becoming a Dividend King

It's also important to remember that you can count on Medtronic for dividend growth. It's lifted its dividend for 45 years, that puts it close to becoming a Dividend King. This shows the company's commitment to rewarding investors.

So, should you buy Medtronic today? The stock trades for 17 times forward earnings estimates, down from about 20 a year ago. This is a reasonable price to pay for a company with a solid earnings track record, steady dividend growth, and a will to pursue expansion through R&D spending and technology like AI.

The stock may not soar from this point in a short period of time. But, over the long-term, the company has what it takes to drive share price performance. All of this means today marks a great entry point -- and while you wait for the stock to climb, you'll benefit from a great deal of passive income.