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Medtronic (MDT) Earns Dow Jones Sustainability Recognition

Zacks Equity Research

Medtronic plc MDT has been included in the prestigious Dow Jones Sustainability North America Index (DJSI North America) for the 12th consecutive year. The index recognizes the world's leading companies for sustainability.

For investors’ note, the index comprises a group of companies based on their performance across a variety of sustainability criteria.

Per Investopedia, DJSI North America captures the top 20% of the largest 600 stocks in the S&P Global Broad Market Index (BMI), based on their sustainability, environmental and governance (ESG) practices. ESG criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.

In this regard, we note that in the twelve years, between fiscal 2007 and 2019, Medtronic’s revenues reached $30,557 billion from $12,300 billion, with a CAGR of 7.9%. With respect to earnings per share (EPS), it reached $5.31 from $2.41, with a CAGR of 6.8%.

 


 

Another notable achievement by the company was the continued inclusion in the FTSE4Good Index Series earlier this year. This index recognizes companies, which meet rigorous environmental, social and governance criteria, and are in a position to exploit responsible business practices.

Medtronic’s Commitment and Beliefs

The company believes that the basis of its long-term growth strategies of therapy innovation, globalization and economic value is continued commitment to global corporate citizenship, centered on creating value and working responsibly on all fronts, where its business intersects the society. It believes that focusing on the most relevant issues like accessible healthcare, and improved quality of product and patient care is the key to achieving long-term success.

Executing Long-Term Growth Plan

Last year, Medtronic launched a restructuring initiative called Enterprise Excellence plan, aimed at $3 billion of annual growth run rate savings by the end of fiscal 2022. The company expects to hold on to the ongoing growth momentum on its enterprise excellence initiatives, particularly on the SG&A line. The program focuses on implementing and driving efficiencies and improvements across the company. With this initiative, Medtronic plans to leverage the efficiency to boost adjusted operating margin and EPS.

Share Price Performance

The company has gained 14.2% in the past year compared with the industry’s growth of 0.7% and the S&P 500 index’s rally of 3.1%.

Zacks Rank & Other Stocks to Consider

Currently, Medtronic carries a Zacks Rank #2 (Buy). A few other top-ranked stocks from the broader medical space are Baxter International Inc. BAX, GW Pharmaceuticals PLC GWPH and Neurotrope, Inc. NTRP.

Baxter with a Zacks Rank #2, has a projected long-term earnings growth rate of 12.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GW Pharmaceuticals estimates third-quarter earnings growth rate to be 72.9%. It currently sports a Zacks Rank #1.

Neurotrope, with a Zacks Rank #2, has a projected earnings growth rate of 27.7% for the third-quarter of 2019.

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