MDT is a high-conviction buy due to undervaluation relative to sector median and improving fundamentals in medical robotics and cardiac solutions.

today well, we are going to be talking about really one of my all-time favorite dividend paying stocks. One that I feel is um not only one of the greatest kind of long-term holds for decades, I would say of consistent and reliable income, but they also just happen to be trading at an absolute steal of a valuation, too.

And that is, of course, Medtronic, ticker symbol MDT.

Who I know I bring this one up a lot on this channel, but it is for very good reason. And right now, I feel is really one of the best times to be adding to this position, too, before an inevitable recovery in price.

That we're actually already seeing take shape, especially in the underlying business, which I'm going to talk to you about today.

Now, for those that don't know, Medtronic is actually the largest medical device company on the planet, really. A producing the most critical supplies and tools, uh infrastructure, and even software and services that hospitals rely on every single day.

With everything from pacemakers and cardiovascular implants to even advanced surgical robotics. These are absolute necessities for the healthcare sector that should always see demand rising long-term.

In fact, the only um place where I could see any kind of risk really entering into this stock is really strictly, I would say, coming from just kind of the turbulent macro conditions that are surrounding the sector coming off the pandemic, which is causing the stock to trade at even the same level today as it did an entire decade ago.

While also being down over a third of its entire value from the top.

So, what exactly went wrong here for Medtronic? Well, you know, when hospitals were forced to abruptly cancel their highly profitable elective procedures and surgeries as the world shut down, well, it caused many of those hospitals to actually go bankrupt.

And even when the world finally reopened, Medtronic got slammed with all sorts of, you know, supply chain bottlenecks. There was tariffs, you know, rising inflation costs, high interest rates.

You know, all things that would absolutely affect the world's largest, uh, you know, global medical device company like this. And even Medtronic themselves dealt with some company-specific issues, like some quality control issues that, you know, were, um, yeah, just like I said, a little a little more company-specific, too.

And to make matters worse, uh, this being really, um, I would say the most recent of of all their kind of challenges, is that lately, uh, Wall Street has been panicking over the giant rise of GLP-1 weight loss drugs.

Uh, some people see this as as a great opportunity and and stocks that can benefit from it. But for the stocks that can be There's actually, you know, a lot of people don't even kind of realize this, but Wall Street feels that there are companies that can actually be negatively impacted by the rising GLP, um, GLP-1 weight loss drugs.

And the fear really is that if the poppy if populations, you know, suddenly start losing weight, then there could be a giant reduction in the need for weight loss surgeries or even in some cases like cardiovascular implants.

And to complicate things even further than that, Medtronic also recently executed a major restructuring by spinning off its diabetes unit into a completely separate company, too.

Now it's called uh, MiniMed, which is a temporarily It's going to be affecting their near-term earnings and year-over-year comparisons.

But guys, this right here is why I buy the dip on these type of plays because the deeper fundamentals are I would say, in my opinion, going to be coming right back going forward.

In fact, the turnaround and already taking shape nicely and we can see that.

Last quarter, for example, they did close to 10 billion in sales, which was up about 14% year-over-year, marking their strongest performance in nearly eight years when you strip out the weird pandemic anomalies.

Uh they also beat expectations on the bottom line, too, and even raised their full-year guidance, as well.

Like I said, under the hood, within the fundamentals, their underlying segments are performing better than ever. Uh for example, their cardiac ablation solutions business exploded with 88% global growth year-over-year.

Their Hugo uh robotic systems um it actually earned recently FDA clearance for urologic procedures, too. And they're they're actively integrating brand-new AI features into their software suite across the board, which I feel will will only strengthen their competitive moat even further, even partnering with Nvidia on various new platforms and services, too.

Uh but most exciting of all, you know, we can really just look at how aggressively they are expanding into that robotics footprint to really try to capture what what I feel is a a big chunk of what I think will likely be the biggest growth driver in medical surgeries going forward.

Uh that Hugo system that I mentioned, um that just got the FDA clearance for urology, well, Medtronic is also filing for tons of other clearances, too, that, once they start rolling in, I think investors will have to take notice.

And most recently, for example, this includes FDA filings for both general and gynecologic uh surgeries, which would open the door to some very high-volume, highly profitable new markets.

Uh they're also taking their proven legacy tools, like their LigaSure vessel sealing technologies that have already been used in over 35 million procedures worldwide, and they're natively integrating them directly into the Hugo robotic arms, the arms of the actual like robot system.

And that right there, like I think it's just a great example of how being able to integrate all these different products and services and different parts to this entire like ecosystem robotic kind of ecosystem is what I feel is going to is going to translate into hospitals not just buying, you know, a single robot.

Like when you think of Medtronic's all their future potential in medical robotics, it's not just in selling like one single robot. It's in these hospitals having to really adopt an entire surgical ecosystem from Medtronic that is super expensive, that is highly highly specialized.

And the switching costs are going to be very high. The learning curve is going to be very high. You're just not going to want to rip that out and go with something else that is not proven and that doesn't have the the track record of a company like Medtronic.

So I I just think that that's really providing this big moat for them.

And again, all of this is being infused with real-time artificial intelligence. And just recently, for example, Medtronic launched Touch Surgery Aid, which is the very first FDA-cleared AI algorithm that runs live during these robotic procedures, essentially acting like a blind spot monitor for surgeons.

I can instantly track instruments and provide real-time visual assistance as they operate.

And so as the entire medical field shifts towards, you know, digital AI-assisted surgery, which I I think is very much going to be the case going into the future, well, I just really think that Medtronic is positioning themselves much better than most to be at the absolute forefront of that transformation.

While also building this huge economic moat that will keep hospitals locked into their high-margin ecosystem for decades to come. And again, I just think like you're just not going to be able to switch away from that.

Once you're locked in with Medtronic, you're very likely just going to keep them on as a customer and and and you're just going to continue to rely on them more and more over time.

And so it's why, you know, when you kind of zoom out of all of this, when you zoom out of all the business, all the products, all the services, everything that they're launching, everything that they've been doing, the the giant track record that they have, when you zoom out and you look at the company's financials, well, analysts are projecting them to generate more sales and profits by billions of dollars more than they ever did before the pandemic ever even happened.

You know, when you look at the actual stock price, it's actually sitting lower today with a valuation that is over 20% cheaper than the sector median, too. And I I actually think that valuation would be much cheaper if it didn't have some some tough comps from the spin-off and and and other things that are being factored into it.

But it's actually, in my opinion, it's actually much lower than that, but either way, 20% cheaper than the sector median is a huge deal when you're talking about the company that is holding the most market share in their respective field.

And when you look at the dividend, well, that's now been grown for nearly five decades in a row, meaning that Medtronic is right on the cusp of breaking dividend king status. They're essentially a dividend king now.

And that yield has has been risen also to one of its highest levels ever in their entire history because again of the heavy suppression of that stock price.

So for me, all of that just translates to a screaming buy on this stock here. Now yes, the macro conditions absolutely suck right now for many sectors, by the way, not just health care, but in my opinion, the long-term picture is just as bright as ever for these type of stocks that are absolute necessities to their respective industries.

And especially with, you know, our aging populations that going to need greater care more than ever before. I mean, just look at like the baby boomer population, how many of them will be in in of retirement age, demand for health care services, all that type of stuff is just going to continue to rise and rise over time.

And so, you know, if if if that dividend I would you know, speaking about the dividend, this whole video is really structured around that dividend. If that dividend has not been cut for the past five decades throughout all the global conflicts and wars and economic recessions, the Great Recession, um the the the pandemic, right?

Like so many hurdles, gigantic speed bumps along the way, something some events that, you know, many people would consider like once-in-a-lifetime type of events. If all those catastrophic things weren't enough to force them to cut that dividend, if they continue to not only pay the dividend, but they actually grew their dividend every single year through all of that, then I have absolutely zero reason to to believe that it's ever going to get cut in the future, either.

When again, I actually think that demand for all of that Medtronic products and services is only going to go up, not down.

So, for me, this is um really it's probably always going to be one of my highest conviction dividend plays in the entire market for the future. Do you agree with my assessment on Medtronic? Um do you own Medtronic stock yourself?