Medtronic(US:MDT) The Motley Fool·2025-08-22 08:10Core Viewpoint - Medtronic is currently facing challenges but has a historically high dividend yield and is making strategic decisions to improve its business outlook, making it an attractive investment opportunity for long-term investors [2][10]. Group 1: Business Performance - Medtronic's stock has declined approximately 30% from its 2021 highs, reflecting investor concerns, yet the company remains a leading medical device manufacturer with a strong business foundation [5]. - The company is experiencing delays in new product development and rising costs due to inflation, which are typical challenges for large firms, especially those with a market cap of nearly $120 billion [7]. Group 2: Dividend History - Medtronic has a proven track record of increasing its dividend for 48 consecutive years, nearing Dividend King status, indicating a robust business model capable of weathering economic fluctuations [8]. - Despite current challenges, the board has continued to increase the dividend, with the latest increase being a modest 1.4%, signaling confidence in the company's future [9]. Group 3: Strategic Decisions - Medtronic is actively working on new product launches, including surgical robots and heart ablation technology, suggesting an end to the recent R&D drought and potential for future growth [11]. - The company is streamlining operations to enhance profitability by focusing on high-potential segments and plans to spin off its diabetes division in 2026, which is expected to be accretive to earnings while maintaining its dividend policy [12]. Group 4: Market Sentiment - Recent earnings reports exceeded analyst expectations, and the company has raised its full-year guidance, indicating positive momentum [14]. - The inclusion of a representative from activist investment firm Elliott Management on the board suggests that notable investors are recognizing the potential in Medtronic's stock [14].