The past five years haven't been great for medical device maker Medtronic (MDT -0.45%). Normally investors would expect a stock to generate positive gains over a five-year period, but Medtronic's stock is in negative territory.

The company faced some challenges in recent years but its operations remain profitable and Medtronic is still pursuing growth opportunities. Where will it be five years from now, and should investors expect that Medtronic's stock will perform better during that stretch compared to the previous five years?

Will Medtronic's growth rate improve?

Aside from disruptions in its business due to the pandemic, Medtronic for the most part is a relatively slow-growing company. Over the past five years, it averaged a growth rate of less than 2%. Whether it can improve upon that will be the top question for investors.

MDT Revenue (Quarterly YoY Growth) Chart

MDT Revenue (Quarterly YoY Growth) data by YCharts

Part of the issue was supply chain problems and lockdowns in China that weighed down its operations. Now that the healthcare industry is in more of a state of normalcy and COVID-19 is less of a concern, those are issues that the company can worry less about going forward.

Medtronic also has a connection to artificial intelligence (AI), which could improve the appeal and effectiveness of its products. Its GI Genius endoscopy module, for example, uses AI to help find early-stage polyps before they become cancerous. The Food and Drug Administration granted clearance for the computer-aided detection system in 2021, and it's an example of how innovation could strengthen Medtronic's business in the future.

Medtronic, in an effort to focus more on high-growth areas, is also in the process of selling a majority stake in its patient monitoring and respiratory intervention operations. According to Reuters, the company is reportedly close to a sale that could value the businesses at over $7 billion. Not only would that give Medtronic an influx of cash, but by freeing up resources so that it can pursue faster-growing areas of its business, it could improve the company's lackluster growth rate.

By getting leaner, resuming normal operations, focusing more on growth, and launching new products, the company should improve its growth rate in the next five years.

Will Medtronic's dividend remain intact?

As Medtronic focuses on growth initiatives, a key question income investors may wonder about is the safety of the dividend, which currently yields 3.8%. A quick look at its payout ratio, which is 100%, suggests that the dividend may not be sustainable. The number is elevated, in part, because of one particularly bad quarter last year where earnings per share declined by 67% thanks to a $764 million income tax adjustment.

As measured by cash flow, Medtronic's payout looks more sustainable. Over the trailing 12 months, it reported free cash flow of $4.4 billion and it paid out $3.6 billion of that in dividends. There is a buffer there, but it isn't a huge one. And as Medtronic invests more in growth opportunities, that may put more of a strain on available cash.

The company also has a dividend streak of 46 consecutive years. And its last increase was just a $0.01 per-share bump to the payout, suggesting that the healthcare company is feeling squeezed.

Despite the pivot toward growth, Medtronic probably needs to keep its dividend streak going, even if that means adding more decimal places to the dividend to demonstrate (even minimally) that the payout is rising. I wouldn't expect significant dividend growth from Medtronic over the next five years, but I would expect dividend income to continue to rise nonetheless.

Can Medtronic stock turn things around?

Over the past five years, Medtronic's stock price fell by more than 20%. But in the next five years, the stock has the potential to improve its trajectory. By focusing on improving its growth rate and with more stability in the healthcare industry, Medtronic's valuation is likely to rise in the future given its strong position in the industry. With a forward price-to-earnings multiple of only 14, the stock trades below the industry average of 19. For long-term investors, Medtronic can make for a good (but not necessarily great), cheap buy right now.