Medical device firm Medtronic ( MDT) has managed to fare better lately; shares of the company have climbed 20% over the last year. Medtronic develops everything from pacemakers and defibrillators to stents and insulin pumps. Heart products have traditionally contributed around half of MDT's sales, a solid positioning given the sheer number of people around the world who suffer from heart disease and related ailments.

Innovation has been a key to Medtronic's success. The firm spends a considerable chunk of effort on R&D, and it's managed to build out an attractive pipeline of medical device products through a combination of internal investment and tech acquisitions from other firms. While MDT's offerings should help buoy shares in the near-term, looking longer-term, a rising tide is likely to lift all ships in the medical device business.

From a financial standpoint, Medtronic is in solid shape, with a reasonable amount of balance sheet leverage and plenty of liquidity to play with. Couple that with impressive free cash flow generation, and investors have a recipe for a dividend hike in the next quarter. Right now, MDT pays a 26-cent dividend that equates to a 2.2% yield at current price levels.

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