Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, medical-device giant Medtronic (NYSE: MDT) has earned a respected four-star ranking.

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

Medtronic facts

Headquarters (Founded)

Minneapolis (1949)

Market Cap

$38.8 billion


Health-care equipment

Trailing-12-Month Revenue

$15.8 billion


CEO William Hawkins, III (since 2007)
CFO Gary Ellis (since 2005)

Return on Equity (Average, Past 3 Years)



$3.8 billion / $9.5 billion

Dividend Yield



Johnson & Johnson (NYSE: JNJ)
Boston Scientific (NYSE: BSX)
St. Jude Medical

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

On CAPS, 94% of the 1,299 members who have rated Medtronic believe the stock will outperform the S&P 500 going forward. These bulls include lmdaa and All-Star mrindependent, who is ranked in the top 1% of our community.

Just last month, lmdaa tapped Medtronic as a healthy income opportunity: "Excellent company with good dividend. Currently at a relative low point in price. Will likely regain price with new products and changing demographics requiring more health care."

In fact, shares of the world's largest medical-device company are down 18% so far in 2010, lagging the S&P 500 by a wide margin. Of course, with Medtronic now trading at a forward price-to-earnings ratio discount to close rivals Johnson & Johnson, St. Jude, and even the embattled Boston Scientific, it's easy to see why the stock has recently drawn the attention of several top Fools. While squeezed hospital budgets and a lack of evidence supporting the benefits of spinal surgery have proven to be big headwinds for Medtronic of late, CAPS All-Stars like mrindependent think the company's positives are now too cheap to ignore:

Medtronic is a very successful company in the thriving field of medical devices. Historical sales growth is strong, but much of the growth is based on acquisitions. Historical profits are robust and grow consistently. The company has significant debt, but nothing that it cannot handle given its $3 billion cash warchest and robust profitability. Based on the foregoing, Medtronic seems to be significantly undervalued.

What do you think about Medtronic, 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. Johnson & Johnson is a Motley Fool Income Investor pick, and Motley Fool Options has recommended a diagonal call position on it. The Fool owns shares of Medtronic. The Fool's disclosure policy always gets a perfect score.