MDT

Dividend Growth Giant Medtronic Reiterates Expectations

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Image source: Medtronic investor presentation By Kris Rosemann As it is a core holding in the Dividend Growth Newsletter portfolio, it is no surprise we are high on Medtronic’s (MDT) free cash flow generating ability. The company remains committed to churning out dozens of billions of dollars in free cash flow generation in coming years, and we like management’s strategy on the allocation of the capital it expects to generate. Medtronic reported a solid first quarter of fiscal 2017 (ended July 29) on August 25. Though revenue fell 1% as-reported, revenue increased more than 5% on a constant-currency, year-over-year basis when ignoring the extra selling week in the comparable period of fiscal 2016. The firm’s ‘Cardiac and Vascular Group,’ ‘Minimally … Read more

April Deals May Flower Future Growth

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Image Source: Iqbal Osman By Kris Rosemann Thursday, April 28, was marked by a surge of M&A activity, as major corporations continue to search for growth as global economic concerns remain and the US economy shows signs of slowing. The world’s largest economy, which is accustomed to slow starts to the year, saw seasonally-adjusted GDP grow at a 0.5% rate in the first quarter of 2016, the slowest rate for the first quarter since 2014. Though a rebound in GDP growth in the second quarter has followed in nearly every year since the Great Recession, a variety of global pressures has caused US GDP growth to slow on a quarter-over-quarter basis since the second quarter of 2015 when it nearly … Read more

Treasury Erects Iron Tax Curtain

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Image Description/Source: Berlin Wall, 1963; Roger “If history is any guide, it would seem that tax lawmakers may want to think about the current political agenda’s similarities with respect to that of a “new” Berlin Wall–not one built of barbed wire but of prohibitive, restrictive tax laws–and whether such measures make sense in light of the events of the late 1980s.” – Valuentum Securities Late Monday April 4, the US Department of the Treasury launched an all-out attack on companies pursuing tax inversion deals and a technique called earnings stripping, the latter used as a means to minimize taxes after an inversion. Stating in no uncertain terms that such companies have only been successful due to the “benefits of being based … Read more

Medtronic Expects to Generate $40 Billion in Free Cash Flow in Next 5 Years

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Image Source: Medtronic, JP Morgan Healthcare Conference Presentation, January 11 On March 1, top holding in the Dividend Growth Newsletter portfolio Medtronic (MDT) reported solid fiscal third-quarter results, now a full year after it completed the deal with Covidien. In the period, Medtronic’s comparable, constant-currency revenue advanced 6% while it recorded non-GAAP diluted earnings per share of $1.06. Management complained of currency headwinds, not unlike that of other multinationals, but reiterated its 2016 diluted non-GAAP earnings per share in the range of $4.36-$4.40, which includes a forex headwind of $0.45-$0.50 in the year. Non-GAAP earnings in Medtronic’s case “relate to charges or gains that management believes may or may not recur with similar materiality or impact on results in future … Read more

Future Free Cash Flow to Drive Medtronic’s Dividend

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Medtronic (MDT), a core holding in the Dividend Growth Newsletter portfolio, reported strong results in its fiscal second quarter, performance released December 3. All of its segments delivered revenue growth in the quarter on a comparable, constant-currency basis, which includes comparable results from Covidien’s businesses. Total revenue grew 6% on a comparable, constant-currency basis, to $7.1 billion, which is a 62% increase from Medtronic’s reported results in the prior-year period. Medtronic posted strong growth in the US and non-US developed countries across the world of 4% and 6%, respectively, as well as 11% growth in emerging markets. The Greater China, the Middle East & Africa, Latin America, India, and Southeast Asia regions all grew revenue at a double-digit pace on … Read more

Williams’ Rejection, Medtronic’s Hike, eBay’s Sale, and Hershey’s Disappointment

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Williams Companies Rejects Offer from Energy Transfer Equity Natural gas pipeline company Williams Companies (WMB) has seen shares jump after Energy Transfer Equity (ETE) confirmed reports that it had made a bid to acquire the company. Despite the all-equity offer of $64 per share representing a 32% premium to Williams’ June 19 closing price, the offer was rejected by the firm as significantly too low. ETE has made multiple attempts to talk with Williams’ management about a possible merger in the past half year, and ETE has said its offer is contingent on the abortion of Williams’ pending purchase of Williams Partners (WPZ). The initial offer came on May 19, six days after Williams Companies announced it would buy Williams … Read more

Dividend Increases for the Week Ending June 19

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Below we provide a list of firms that raised their dividends during the week ending June 19. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Farmers & Merchants Bancorp (FMAO): now $0.22 per share quarterly dividend, was $0.21. FBR (FBRC): now $0.20 per share quarterly dividend, first dividend paid. First Bancorp (FNLC): now $0.22 per share quarterly dividend, was $0.21. Great Southern Bancorp (GSBC): now $0.22 per share quarterly dividend, was $0.20. Investar (ISTR): now $0.0078 per share quarterly dividend, was $0.0074. Medtronic (MDT): now $0.38 per share quarterly dividend, was … Read more

Medtronic On Track with Covidien Integration

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Image Source: U.S. Embassy Kyiv Ukraine Today, June 2, Dividend Growth Newsletter portfolio holding Medtronic (MDT) reported its first results including business from recently-acquired Covidien. The acquisition was successfully closed on January 26, early in the fourth quarter of the firm’s fiscal year 2015, and was worth nearly $50 billion. In its report, management presented results in a couple ways, one on a strictly-reported basis and the other on a constant-currency, comparable basis. The latter includes Covidien’s prior-year monthly results aligned to Medtronic’s fiscal quarters, which the company feels gives a more accurate picture of underlying performance and the success of the early stages of integration of Covidien. The strictly-reported basis, on the other hand, provides a better understanding of the … Read more

Medtronic Surpasses $70 Per Share

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Interested in what the path of Medtronic’s (MDT) equity price has been since it was added to the Dividend Growth portfolio? Incredible, no? It’s so important that we point to our favorite ideas such that you can become familiar with our track record. We don’t get everything correct, but our hit rate on new ideas has been near perfect. Unlike other research houses, we take to heart Warren Buffett’s two rules:  Rule No. 1: “Never lose money. Rule No. 2: Never forget rule No. 1.” This is why it may be a few weeks or a few months between each email transaction alert we send out to members. We want to deliver only the best. If we were interested in … Read more

The Dividend Dilemma

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One of the core tenets of the Valuentum process not only rests in the all-important price vs. value consideration (see Valuentum’s Brian Nelson talk about that here), but also in “letting winners run.” At first read, these two items appear to be at odds with each other. For example, we preach about getting stocks at a bargain, but yet, we don’t sell holdings when they start to move beyond our estimate of their fair value. What gives? At the Valuentum core, we prefer an entry point that corresponds to the time when shares have substantial valuation and pricing support (i.e. they have high Valuentum Buying Index ratings), and we prefer an exit point when shares have little valuation and pricing … Read more