Medtronic Quietly Raised Its Dividend Again. Is It a Buy for Income Investors?
Medtronic just extended a nearly half-century dividend streak, but its raise barely outpaces inflation while rivals like Abbott and J&J grow payouts far faster. Whether explosive growth in cardiac ablation can close that gap is the real question for income…
Medtronic (NYSE:MDT | MDT Price Prediction) raised its quarterly dividend to $0.72 per share from $0.71, extending its run to 49 consecutive years of increases. The raise works out to about 1.4%. It lands as the company posts its strongest growth in years and finishes splitting off its diabetes unit. For retirees, the question is whether a 2.95% yield earns a spot in an income portfolio.
A Small Raise on a Long Streak
Medtronic declared the higher payout on June 3, 2026, and kept it at $0.72 for the October 16, 2026 payment. That sets the forward annual dividend at $2.88. The pattern is steady but slow: $0.68 in 2022, $0.69 in 2023, $0.70 in 2024.
Peers raise faster. Abbott Laboratories (NYSE:ABT) raised its quarterly payout to $0.63 from $0.59, roughly 6.8%, and has increased it for 54 consecutive years. Johnson & Johnson (NYSE:JNJ) lifted its dividend 3.1% to $1.34 and has a 64-year run. Medtronic is nearing the 50-year Dividend King threshold.
Cash Flow Covers the Check With Room to Spare
The payout ratio is the share of profit a company hands to shareholders. Medtronic raised its fiscal 2027 adjusted EPS guidance to $5.94-$6.00, so the $2.88 dividend takes about 48% of expected earnings. In the first quarter, free cash flow (cash left after capital spending) reached $1.29 billion, up 120.89%, against $921 million in dividends paid. Management pointed to a strong balance sheet and a 70% cash-conversion rate, with a path to 80%.
Cardiac Ablation Is Powering the Growth Story
First-quarter revenue rose 13.7% to $9.76 billion, and adjusted EPS of $1.45 exceeded the $1.3874 consensus. An extra fiscal week added about $570 million. Cardiac Ablation Solutions grew 88% on the Affera system and Sphere-9 catheter. CEO Geoff Martha said:
“We’re only at the beginning for CAS. With a differentiated platform, a growing installed base, expanding indications and a strong innovation pipeline, we are well positioned to treat more patients.”
J&J’s electrophysiology sales grew just 4.4% in its latest quarter. Martha framed the momentum as broad:
“What gives us confidence is not simply the strength of the quarter, but importantly, the breadth of performance across our businesses.”
MiniMed Split and Margin Pressure Bring Risks
Medtronic completed the separation of MiniMed Group (NASDAQ:MMED) on October 15, 2026. Management expected the exit to lift operating margin about 100 basis points while cutting revenue growth about 20 basis points. Current guidance assumed Diabetes stayed in through fiscal year-end, so expect revisions at the December 10 and 11th investor day. Tariffs cost roughly $185 million in fiscal 2026, and shares remain down 10.09% over five years.
Verdict: A Secure Dividend That Grows Slowly
At $94.33, Medtronic trades at 14x forward earnings, with a beta of 0.567 indicating below-market volatility. Analysts’ average target is $104.62. The dividend looks well covered and durable, which suits retirees seeking stability. It trails Abbott and J&J, so the stronger case rests on ablation-driven earnings growth that could support bigger increases ahead.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
