Even before Medtronic (MDT 0.32%) announced its fiscal fourth-quarter 2026 earnings, the company was telling Wall Street it was starting down a new path. That's a good thing, because the old path wasn't making investors happy, noting that the stock has fallen more than 40% from its 2021 high.
A big part of Medtronic's growth plan is likely to involve acquisitions, such as the already-completed deal for Cathworks and the pending purchase of SPR Therapeutics. Here's what investors need to know about this medical device giant and its attractive 3.8% yield.
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Medtronic has plenty of "firepower"
At an industry conference earlier in the year, Medtronic's CFO explained that the company has the balance-sheet capacity to make acquisitions if it wants to. And with two deals already in the books in 2026, one completed and the other still pending, the company is clearly putting its words into action.
However, it is important to recall how the company got to this point. Essentially, the large and diversified medical device business had become bloated and inefficient over time. That led to slow growth and less-than-inspiring earnings. It took some time to revamp the business, a process that included selling assets, divesting businesses (most notably the spin-off of the company's diabetes business), and streamlining operations.
The end result is a more focused company that can now lean into growth. The plan appears to be working, with the company’s fiscal 2026 revenue growth coming in at the fastest pace in a decade. Organic growth was 5.8%.
NYSE: MDT
Key Data Points
Something notable here, however, is that Medtronic did all of this while continuing to support its dividend policy. It is now just two years away from Dividend King status, with 48 annual increases under its belt despite a major business overhaul. CFO Thierry Pieton made sure to highlight that fact at the industry conference. That the dividend is clearly a point of pride for Medtronic should be very pleasing to dividend investors, given its well-above-market yield. The company announced another increase when it reported its fiscal 2026 earnings, putting it on track to hit 49 consecutive years.
Medtronic is getting back to growth
That said, the bigger story is that Medtronic is returning to growth. One important development is the company's Hugo surgical robot, which is now being used in the United States. This highlights that the healthcare company remains as innovative as ever. However, acquisitions are also an important part of the growth plan.
Acquisitions will be used to augment the company’s innovation. For example, the completed CathWorks deal brings with it the CathWorks FFRangio System. This system enables a non-invasive assessment of a patient's coronary health, a potentially significant advance over current invasive techniques. This aligns with the company's goal of acquiring technologies that complement its existing portfolio.
The pending SPR Therapeutics acquisition will augment Medtronic's position in nerve stimulation. SPR Therapeutics' products help manage pain. Medtronic noted in the news release announcing the deal that the nerve stimulation "segment continues to grow, driven by increasing clinical evidence, expanding reimbursement, and demand for non-opioid, less-invasive pain therapies. Once again, the company is using an acquisition to lean into its strengths.
Medtronic is likely to make more acquisitions
It is impossible to predict acquisitions, but early moves in 2026 suggest that Medtronic has shifted from defense to offense. Acquisitions could be the indicator of that shift, with the company clearly suggesting that more growth-oriented deals are likely.
If you have been looking at Medtronic, buying while it is still deeply unloved on Wall Street could be a good call. If the company's increased acquisitiveness is an indication, this turnaround story could soon turn into a growth story. In fact, management is calling for organic growth to pick up again in fiscal year 2027, hitting a range of 6.75% to 7.25%.
