Better Dividend Play for Retirees: MDT or ABT? One Delivers Significantly More Yield

Which one should a retirement-focused investor own right now: Medtronic (NYSE:MDT | MDT Price Prediction) or Abbott Laboratories (NYSE:ABT)? Both medtech dividend payers have already slipped in 2026. Abbott is down 18.25% year to date and Medtronic is down 6.04%, and those declines have changed the income math for both stocks. I compared them on three measures, and each one has a winner.

Dividend Income: Medtronic Puts More Cash in Your Pocket

Medtronic’s annualized forward dividend is $2.88 per share, for a yield of 3.3%. Abbott’s forward dividend of $2.52 yields 2.56%.

Both payouts are covered about equally well. Medtronic’s dividend comes to roughly 48% of the low end of its fiscal 2027 adjusted EPS guidance of $5.94 to $6.00. Abbott’s comes to about 46% of the bottom of its 2026 range of $5.45 to $5.60. Medtronic also has plenty of cash behind it. Fiscal 2026 free cash flow hit $5.43 billion, and first-quarter free cash flow jumped 120.89% to $1.29 billion.

Abbott raises its dividend faster. Its latest increase, from $0.59 to $0.63 per quarter, was about 6.8%. Medtronic’s went from $0.71 to $0.72, or roughly 1.4%. The payment histories back up both streaks: Medtronic is on its 49th straight year of increases and Abbott on its 54th. Winner: Medtronic. Retirees live on the yield, and Medtronic pays more with about the same coverage.

Growth and Durability: Abbott Has the Better Record

Medtronic had the stronger latest quarter. Revenue rose 13.7% to $9.76 billion, though an extra fiscal week added about $570M. Cardiac Ablation Solutions grew 88%, and organic growth guidance went up to 7.25%–7.75%. The finance chief said “we’re clearly at an inflection from a growth perspective.”

Over longer periods, Abbott comes out well ahead. Its shares gained 182.46% over ten years, compared with 33.96% for Medtronic, which is down 18.1% over five years. Abbott makes money from four businesses: devices, diagnostics, nutrition and established pharmaceuticals. It added Cologuard through the $21B Exact Sciences deal. CEO Robert Ford called 7% “a pretty sustainable kind of growth rate going forward.”

Abbott does have weak spots right now. Comparable sales grew 4.8%, Nutrition fell 3.1%, U.S. Structural Heart dropped 9.8%, and interest expense rose to $299M from $50M. Medtronic has problems too. Its fiscal 2026 constant-currency EPS fell 2.0%, and the Diabetes separation, now going through an exchange offer, could still go wrong. Winner: Abbott. It has shown it can grow earnings and dividends through full cycles.

Valuation and Risk: You Pay Less for Medtronic

Analysts expect about the same upside for both. Medtronic’s $104.83 target sits about 19.1% above its $88.02 price. Abbott’s $120.58 target is about 19.9% above $100.57. Abbott has 4 strong buy and 18 buy ratings, with no sells. Its stock has also swung more widely, trading between $81.39 and $132.08 over the past 52 weeks. Winner: Medtronic. It costs less for about the same expected upside.

Verdict: Medtronic Wins for Retirees Who Need Income Now

Medtronic takes two of the three categories, and it is the better choice for retirees who already depend on dividends. You get a higher yield, a lower valuation, slightly lower volatility, and coverage about as solid as Abbott’s.

Abbott fits investors with 15 or more years until retirement. They can accept less income today in exchange for faster raises and a longer growth record. For the typical retirement income portfolio, Medtronic is the overall winner. Two events to watch: Medtronic’s December 10 and 11th investor day, where it will lay out its capital allocation plans, and whether Abbott hits its Q3 EPS guidance of $1.38–$1.46.

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