3 Reasons to Buy Medtronic Stock

Core Viewpoint - Medtronic, despite recent challenges and underperformance in the market, has potential for long-term investment due to strategic moves and strong fundamentals [1][11]. Group 1: Business Strategy - Medtronic is spinning off its diabetes care unit to become a standalone publicly traded company, which accounted for 8% of revenue but only 4% of operating profits in fiscal year 2025 [3][4]. - The spin-off allows Medtronic to focus on higher-margin opportunities and navigate potential higher manufacturing costs due to tariffs [4]. - The company aims to find lucrative revenue growth opportunities outside of its consumer-facing diabetes care segment [4]. Group 2: Market Opportunities - Medtronic is developing its robotic-assisted surgery system, Hugo, which is underpenetrated in the market, with fewer than 5% of procedures currently performed robotically [6][7]. - The aging population is expected to increase demand for robotic-assisted surgeries, positioning Medtronic favorably for future growth [7][8]. - The Hugo system has completed clinical trials in the U.S. for urologic procedures, with a request for FDA clearance submitted [7][8]. Group 3: Financial Stability - Medtronic has raised its dividends for 48 consecutive years, indicating strong underlying business health and stability [9][10]. - The company is on track to become a Dividend King in two years, making it an attractive option for income-seeking investors [10]. - Medtronic's consistent dividend payments reflect its established leadership in the healthcare market and ability to navigate regulatory challenges [9][10].