Medtronic Inc. Stock Buy Recommendation Reiterated (MDT)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Medtronic (NYSE: MDT) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • MDT's revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.07% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MDT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MEDTRONIC INC has improved earnings per share by 11.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MEDTRONIC INC increased its bottom line by earning $3.38 versus $3.24 in the prior year. This year, the market expects an improvement in earnings ($3.83 versus $3.38).
  • Net operating cash flow has increased to $1,187.00 million or 10.21% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -31.19%.

Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. Medtronic has a market cap of $53.7 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 16.00, below the S&P 500 P/E ratio of 18.00. Shares are up 26.9% year to date as of the close of trading on Wednesday.

You can view the full Medtronic Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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