Which 'Dividend Prince' Will Become The Next King In 2 Years?

Core Insights - Medtronic is on track to become a Dividend King, having increased its dividend for 48 consecutive years and expected to achieve this milestone in the next two years [1][10] Dividend Performance - Medtronic raised its quarterly dividend to $0.71 per share, up from $0.70, resulting in an annualized dividend of $2.84, which yields 2.9%, significantly higher than the S&P 500's yield of 1.2% [2] - The company has a strong capacity to sustain its dividend payments, generating $5.2 billion in free cash flow in the 2025 fiscal year, covering its nearly $3.6 billion dividend outlay [3] Financial Health - Medtronic maintains a robust balance sheet with $2.2 billion in cash and equivalents, $6.7 billion in investments, and $25.6 billion in long-term debt, supporting its strong A/A3 bond rating [5] - The company repurchased $3.2 billion of its shares last year, which contributed to a decrease in total cash dividend payments despite an increase in dividend per share [5] Growth Prospects - Medtronic reported a 6.6% increase in revenue and an 8% rise in earnings per share for the second quarter of its 2026 fiscal year, leading to an upward revision of its full-year guidance [6] - The company is increasing its R&D spending and investments in sales and marketing to drive future growth [7] - Plans to separate its diabetes business are underway, which is expected to enhance margins and earnings per share, with proceeds from this transaction aimed at further share repurchases [8] Strategic Initiatives - A new growth committee has been established to oversee acquisitions, R&D investments, and divestments, aligning with the company's strategic goal to accelerate growth [9]