MDT
Medtronic plc
Healthcare · Medical Devices · Ireland · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 54.2/100 reflects a balanced profile: strong revenue growth and solid profitability are offset by lagging net income growth, a high dividend payout ratio, and modest return on assets.
- Quarterly momentum was broadly positive on the revenue line but inconsistent at the net income level, contributing to a mid-range momentum score.
- The financial health factor was a relative strength, with a debt-to-equity ratio of 0.53 indicating moderate and manageable leverage against a large asset base.
Why Not Higher
- Net income grew only 3.0% versus 8.4% revenue growth in FY2026, and the dividend payout ratio of 75.8% limits financial flexibility, both of which constrained the overall score.
- Return on assets of 5.2% in FY2026 is relatively modest given total assets of $93,028,000,000, and net income was variable quarter-to-quarter, preventing higher scores in profitability and momentum.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2025's $33,537,000,000 to FY2026's $36,364,000,000, a gain of 8.4%, while net income rose only 3.0% (FY2025: $4,662,000,000 to FY2026: $4,801,000,000) and diluted EPS increased 3.3% from FY2025's $3.61 to FY2026's $3.73.
The model rewarded meaningful top-line expansion but tempered the score because bottom-line growth lagged revenue growth considerably, suggesting margin pressure or rising costs absorbed much of the incremental revenue.
In FY2026, Medtronic posted an operating margin of 17.8%, a net margin of 13.2%, and a return on assets of 5.2%.
The model recognized solid operating and net margins as indicators of a profitable business, while the relatively modest return on assets of 5.2% in FY2026 likely constrained the score from reaching the upper range.
In FY2026, Medtronic carried a debt-to-equity ratio of 0.53 against total assets of $93,028,000,000.
A debt-to-equity ratio of 0.53 in FY2026 signals a moderately leveraged balance sheet, which the model viewed favorably as it indicates the company is not overly reliant on debt financing relative to equity.
Quarterly revenue rose sequentially from $8,578,000,000 in 2026Q1 to $8,961,000,000 in 2026Q2, $9,017,000,000 in 2026Q3, and $9,808,000,000 in 2026Q4, showing consistent acceleration. Operating income followed a similar pattern—$1,445,000,000 in 2026Q1, $1,686,000,000 in 2026Q2, $1,464,000,000 in 2026Q3, and $1,872,000,000 in 2026Q4—though with a mid-year dip. Net income was more variable, moving from $1,040,000,000 in 2026Q1 to $1,374,000,000 in 2026Q2, then declining to $1,143,000,000 in 2026Q3 before partially recovering to $1,244,000,000 in 2026Q4.
The model captured a broadly positive revenue trajectory across the four quarters, but the inconsistency in net income and the mid-year dip in operating income tempered the momentum score to a mid-range result.
Medtronic's dividends per share have grown incrementally from $2.72 in FY2023 to $2.76 in FY2024, $2.80 in FY2025, and $2.84 in FY2026, while the dividend payout ratio stood at 75.8% of net income in FY2026.
The model acknowledged a consistent, multi-year dividend growth streak, but the high payout ratio of 75.8% in FY2026 likely limited the score, as it leaves relatively little earnings headroom for future dividend increases or reinvestment.
Medtronic is assigned to the Aging Population macro theme.
Although the Aging Population theme is assigned—reflecting Medtronic's relevance to healthcare demand driven by demographic trends—this assignment did not translate into a score under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Medtronic delivered solid top-line growth of 8.4% in FY2026, with revenue rising to $36,364,000,000, though net income grew only 3.0% to $4,801,000,000, indicating that margin pressure absorbed much of the incremental revenue. The company maintains healthy profitability with a 17.8% operating margin and 13.2% net margin, supported by a moderately leveraged balance sheet with a debt-to-equity ratio of 0.53. Quarterly revenue showed consistent sequential acceleration throughout FY2026, though net income was variable across quarters. The dividend has grown steadily from $2.72 in FY2023 to $2.84 in FY2026, but a payout ratio of 75.8% leaves limited headroom for future increases or reinvestment.
Plain English
Medtronic is a large medical device company that grew its sales by about 8% last year, keeps solid profit margins, and pays a reliable and slowly growing dividend — but its profits didn't grow nearly as fast as its sales, and it pays out most of its earnings as dividends, which limits flexibility going forward.
Bull Case vs. Bear Case
Bull Case
- Revenue grew 8.4% year-over-year to $36,364,000,000 in FY2026, demonstrating meaningful top-line expansion that signals strong underlying demand for Medtronic's products.
- The company maintains a healthy operating margin of 17.8% and net margin of 13.2% in FY2026, reflecting a durably profitable business model.
- Quarterly revenue accelerated consistently from $8,578,000,000 in 2026Q1 to $9,808,000,000 in 2026Q4, pointing to building commercial momentum through the fiscal year.
Bear Case
- Net income grew only 3.0% in FY2026 despite 8.4% revenue growth, suggesting rising costs or margin pressure are significantly diluting the benefit of top-line gains.
- The dividend payout ratio stood at 75.8% of net income in FY2026, leaving little earnings headroom for meaningful dividend increases or reinvestment in growth initiatives.
- Return on assets was a modest 5.2% in FY2026, indicating the company's large asset base of $93,028,000,000 is not generating proportionally strong returns.
What Could Change the Picture
Bullish Triggers
- A sustained improvement in net income growth converging closer to revenue growth rates would signal that margin pressures are easing and that top-line gains are flowing through to the bottom line.
- A reduction in the dividend payout ratio would indicate greater financial flexibility and capacity to reinvest in growth or accelerate shareholder returns beyond the current incremental dividend increases.
Bearish Triggers
- A reversal in the quarterly revenue acceleration trend — particularly if revenue growth stalls or declines from the $9,808,000,000 level reached in 2026Q4 — would undermine the positive momentum thesis.
- A meaningful increase in the debt-to-equity ratio above the current 0.53 level would signal deteriorating financial health and increased reliance on debt financing.
Risk Profile
Low RiskMedtronic's debt-to-equity ratio of 0.53 in FY2026 reflects a moderately leveraged balance sheet that the model viewed as manageable, supporting a Low risk rating. However, the variability in quarterly net income — ranging from $1,040,000,000 in 2026Q1 to $1,374,000,000 in 2026Q2 before declining and only partially recovering — introduces some uncertainty around earnings consistency.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.