Dividend & Financials
Nevertheless, the valuation seems a bit off for the moment. PE ratio is 30, PS at 4.18 and PEG at 2.44. All of these are above industry averages and the company’s own historic means.
Medtronic is a record breaking dividend payer in the true sense. Management has kept the payout ratio high enough to sustain the compounding dividends for all these years. The stock price has surged over 25% since the start of the year, which could be the reason the yield seems so low. Meanwhile, all the valuation metrics (PE, PS, PEG) indicate the company’s stock is overvalued. While there’s no doubt this is an excellent healthcare stock, the MDT dividend simply seems out of reach for the value buyer right now.