A certain type of investor has held Medtronic stock for the past five years; they are patient, dividend-focused, and certain that a company that manufactures pacemakers and spinal cord stimulators would eventually figure things out on its own. This belief was put to the test several times. The stock was negatively impacted by issues with the supply chain, quality control, growing expenses, and an underperforming cardiovascular division. During that time, the share price dropped more than 30% while the overall market continued to rise. Holding Medtronic felt more like obstinate waiting than disciplined investing for a while.
In 2026, the situation changed significantly. Medtronic reported $36.4 billion in revenue for the fiscal year 2026, which concluded in April. This was an 8.4% increase and the company’s highest top-line growth in ten years.
The revenue from cardiac ablation solutions, which increased 88% year over year, was the most striking figure in those results. Until you realize what’s causing it, that figure seems almost unreal. In order to treat irregular heart rhythms more precisely, Medtronic has been introducing a new generation of ablation technology, such as the Sphere-9 catheter and the Affera mapping system. Medtronic seems to be gaining a significant portion of the $15.5 billion global electrophysiology market. Although rivals aren’t standing still, analysts covering the stock have begun to raise their models due to the early momentum.
The longer-term investment case for Medtronic is based on a few key pillars that go beyond the short-term numbers. One is the Hugo robotic-assisted surgery system, which addresses a surgical robotics market that Intuitive Surgical has dominated largely unopposed for years but hasn’t yet made a significant financial contribution. The addressable market is sizable, and Medtronic’s scale provides it with real infrastructure to work with, but gaining traction there won’t happen overnight due to obstacles like hospital adoption cycles, regulatory clearances, and procedure training timelines. The intended separation of its diabetes division into a separate business called MiniMed is another factor driving growth. If the transition goes smoothly, eliminating the diabetes segment should eventually increase overall profitability because it had lower operating margins than the rest of the company.
In addition, if you are considering Medtronic as a long-term investment, it is almost impossible to overlook the dividend. For 49 years in a row, the company has increased its payout. It is officially classified as a Dividend King after another year of increases, a title shared by less than 60 US publicly traded companies. Medtronic paid out $3.64 billion in dividends and generated $5.43 billion in free cash flow in fiscal 2026. The forward dividend yield is approximately 3.1%. The coverage ratio allows for further increases without putting undue strain on the balance sheet. It is truly uncommon to have that level of consistency.
Medtronic stock is not guarantyd by any of this. With an estimated $200 million in net tariff expense anticipated in fiscal 2027, which would reduce gross margins by roughly 50 basis points, tariff pressures are posing serious challenges. After a robust first half of the fiscal year, there is also some worry that organic growth may slow down in the second half; analysts have predicted a step-down that will need to be monitored. Additionally, even though the MiniMed separation makes strategic sense, it increases execution uncertainty during the transition. These risks are not insignificant.
Even so, Medtronic doesn’t appear pricey for what it’s producing, trading at about 18 times forward earnings while the larger S&P 500 is at about 21 times. The stock is currently rated as a buy by 21 analysts, with a consensus price target of $103, or about 10% above current levels. The operational recovery that has been quietly taking place may not have been fully reflected by the market. Alternatively, skeptics might be justified in holding back due to the second half’s deceleration risks. In any case, the story of Medtronic regaining its footing after years of poor performance is more intriguing than the stock’s calm, steady price chart may indicate.
