Think this: $1,000 ten years ago
Let’s play along. Take a trip back to 2015 in your head. Maybe you were embarking on a new job, celebrating a milestone, or thinking about putting some money into the stock market. Let’s say you invested in $1,000 worth of Medtronic shares.
Fast forward to today. How much would you have? Guess what. Your $1,000 investment would be worth about $1,065 today. That’s a gain of only $65 in ten years.
Not exactly a game-changer, huh? Especially if you look at the same $1,000 invested in a plain vanilla S&P 500 index fund and it would be worth about $2,034 today. That’s nearly double.
What happened with Medtronic?
So, why did Medtronic lag behind? After all, it’s one of the biggest names in medical devices—a company you’d think would have strong, steady growth.
The answer lies in the company’s past strategy. For years, Medtronic carried a huge and somewhat unwieldy portfolio of businesses. Growth slowed down, and the company had trouble keeping pace with competitors and the broader market.
To fix that, Medtronic has been retrofitting. It’s divested some of the non-core business and focused more on the areas where it sees future growth. That doesn’t change overnight, but it’s already reshaping the company.
A silver lining: the dividend
And here’s where Medtronic still shines. Dividends.
If you’re not familiar, dividends are payments companies give to shareholders as a reward for owning their stock. Medtronic has been paying dividends for nearly five decades—48 years in a row, to be exact. Even better, those payouts have grown by an average of 5.3% each year over the past five years.
Today, the dividend yield is around 3.7%. That’s $3.70 a year in cash payments per $100 invested, plus any gain in the stock price. For long-term investors seeking stable income, that’s a draw.
Medtronic and the future of healthcare
Medtronic is pouring money into technology—and specifically artificial intelligence (AI).
For example, it’s using AI in its endoscopy lines to detect polyps more effectively. Such a development has the power to bring tangible benefits to patient care and still keep Medtronic competitive in an increasingly changing medical field.
The financials are also healthy. In its most recent quarter, Medtronic reported $8.9 billion in revenue, a 4% gain over the same time last year. Even better, operating profit was $6 billion, a gain of 16%. Those numbers suggest that the company is recovering.
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Is Medtronic a bargain today?
Here’s the good news: Medtronic stock appears fairly priced. It has a forward price-to-earnings (P/E) multiple of around 16, which is below its five-year average of 17.
That’s not overpaying for stock relative to its past. For those who want income (from dividends) and the potential upside, Medtronic might be worth considering as a long shot.
The big “what if” question
Of course, we can’t discount that the last 10 years weren’t great ones for Medtronic shareholders. Making $1,065 from $1,000 is hardly stellar. Yet other stocks and even plain-vanilla index funds paid out much better.
Investing isn’t merely about viewing the rearview mirror. The only question is: What comes next?
Medtronic’s dividend pledge, its entry into AI-driven healthcare, and its present valuation make it a stock that remains chock-full of promise. It will never offer the type of blowout growth one can get from tech giants, but it may offer steady, reliable action for patient long-term investors.
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The bottom line
If you’d invested $1,000 in Medtronic ten years ago, you’d have about $1,065 now—not a great return compared with the broad market. But the company isn’t standing still. With nearly half a century of dividend history behind it, a strong dedication to innovation, and an enhanced business model on the books, Medtronic is still worth considering for a diversified, long-term portfolio.
So the next time you think about where to put your money, remember this: the past performance is just half the story. The biggest potential may lie in what’s ahead.
