Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Irish drug and medical device maker Covidien (NYSE: COV) earned a respected four-star ranking.

With that in mind, let's take a closer look at Covidien's business and see what CAPS investors are saying about the stock right now.

Covidien facts

Headquarters (founded)


Market Cap

$18.4 billion


Health-care equipment

Trailing-12-Month Revenue

$10.76 billion


Chairman/CEO Richard Meelia
CFO Charles Dockendorff

Return on Equity (average, past 3 years)



$2.1 billion / $2.96 billion

Dividend Yield



Becton, Dickinson (NYSE: BDX)
C.R. Bard (NYSE: BCR)
Johnson & Johnson (NYSE: JNJ)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 380 members who have rated Covidien believe the stock will outperform the S&P 500 going forward. These bulls include Geofiz and All-Star Drew2142, who is ranked in the top 2% of our community.

Just last month, Geofiz tapped Covidien as a rather healthy opportunity: "Appears to be quite well run, has made several sensible acquisitions, yet has an outstanding balance sheet with about as much cash as [long-term debt]. Excellent cash flow and ROE."

Since spinning off from Tyco International (NYSE: TYC) in 2007, Covidien has slowly regained its status as a health-care powerhouse. To be sure, the company continues to face stiff competition in each of its divisions, including Becton and C.R. Bard in medical devices, Teva (Nasdaq: TEVA) in pharmaceuticals, Procter & Gamble (NYSE: PG) in retail, and of course, Johnson & Johnson in basically everything. But thanks to management's efforts in shedding noncore assets and entering markets only where it has the expertise to lead, Covidien has steadily built a decent-sized moat in several product niches. And with the shares trading at a slight forward price-to-earnings discount to each of those very same rivals, Covidien seems like a relatively inexpensive bet, as well.

CAPS All-Star Drew2142 sums up the bull case:

The commitment to grow, and willingness to do that through acqusitions (and organically when possible), and then actually go out and make some fairly smart purchases (reasonably priced though... not home runs by any stretch) means profits for the company. Profits for the company, means profits for the investors. They seem to be a market-leader in almost all of their divisions, and if they aren't, they certainly aren't bashful in selling them off for hundreds of millions using that money to gobble up smaller niche leaders and plug gaps in the portfolio. ...

The commitment to innvovate, grow, shed losing brands/divisions, and push it's titantic-sized employee force means that the leaders at the top have their eyes on target, and that target keeps moving forward. I'm all for a company that has a ton of net cash coming in, and wants to put it [to] use instead of just watching the bank account grow. Especially if they do it wisely, which [Covidien] appears to be doing.

What do you think about Covidien, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned.

Becton and Covidien are Motley Fool Inside Value choices. Johnson & Johnson and Procter & Gamble are Motley Fool Income Investor recommendations. The Fool owns shares of and has written covered calls on Procter & Gamble. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.