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Business Report Medtronic Mdt Is Focused On Essay

Business Report Medtronic (MDT) is focused on manufacturing and marketing devices used in health care. The different kinds of products that are sold by the company include: cardio vascular / ear / throat / gastroenterology merchandise, surgical equipment, implants and imaging systems. The company is based out of Minneapolis, Minnesota and was incorporated in 1949. ("Medtronic," 2012)

Abbott Labs is a health care products manufacture. They are concentrating on the distribution and sale of merchandise in a number of segments. The most notable include: pharmaceuticals, diagnosis systems / tests, stents, generic drugs and medical management software. The firm was established in 1888 and is located in Abbott Park, Illinois. ("Abbott Labs," 2012)

Financial statement and ratio analysis on both companies.

The financial statements and ratio analysis are showing how both firms have strong fundamentals. The below table is contrasting these factors for Medtronic and Abbott Labs.

Financial Information and Ratios of Abbott Labs vs. Medtronic

Company

EPS

Revenues

Assets

Liabilities

PE Ratio

Return on Equity

Medtronic

$.83

$16.25 billion

$9.18 billion

$15.97 billion

10.83

20.60%

Abbott Labs

$1.08

$39.46 billion

$61.80 billion

$27.20 billion

12.46

19.16%

("Abbott Labs," 2012) ("Medtronic," 2012) ("Medtronic 10Q," 2012) ("Abbott Laboratories 10Q," 2012)

This information is showing how the balance sheet of Medtronic and Abbott Labs are both strong. However, the company that is strongest is Abbott Labs. The reason why is because they are: earning more money, have higher levels of assets and lower liabilities. Moreover, the company is trading at a forward PE ratio of 12 and they are providing stockholders with a 19.46% return. This is indicating that they have stronger fundamental support. The financial ratios are illustrating how the firm is undervalued and is delivering strong earnings growth. ("Abbott Labs," 2012) ("Medtronic," 2012) ("Medtronic 10Q," 2012) ("Abbott...

While Medtronic has been facing upward momentum that has been accompanied by volatile sell offs at select points. This has increased the volatility of the stock in contrast to Abbott. Evidence of this can be seen in the below chart that is comparing the performance of shares during the last year.
This is illustrating how Abbott Labs has stronger momentum. This is because the fundamentals are supporting increased investor confidence and solid valuations. It is at this point that the price of the stock will trade higher. From a technical analysis perspective, this has been occurring with Abbott Labs. ("Abbott Labs," 2012) ("Medtronic," 2012) (Weinstein, 1988)

While Medtronic has been facing, select amounts of volatility that are accompanied by upward momentum. This is because the firm does not have as strong of a balance sheet and other fundamentals. These factors have caused investors to become emotional. This has resulted in the price of the stock seeing gradual increases that are much smaller in contrast with Abbott Labs. ("Abbott Labs," 2012) ("Medtronic," 2012) (Weinstein, 1988)

Indicate which company you feel is the most financially stable.

The company that is the most financially stable is Abbot Labs. This is because the firm has greater EPS, revenues and assets. While the PE ratio and the return on equity is very close for both companies. Moreover, the liabilities are lower on a percentage basis for Abbott Labs. This has caused management to become more optimistic about the future.

Evidence of this can be seen with comments from Miles White (the CEO) who said, "Abbott continues to deliver strong results as we remain on track to separate into two leading health care companies. During the second quarter, we launched and advanced numerous projects in our promising, broad-based pipeline and achieved key milestones in the separation process. We are confirming our ongoing earnings-per-share guidance for the full-year 2012 of $5.00 to $5.10, reflecting another year of expected strong performance. For the full-year 2012 we are…

Sources used in this document:
References

Abbott Labs. (2012). Stock Charts.com. Retrieved from: http://stockcharts.com/h-sc/ui

Abbott Labs. (2012). Yahoo Finance. Retrieved from: http://finance.yahoo.com/q/pr?s=ABT+Profile

Abbott Laboratories 10Q. (2012).

Abbott Reports Strong Second Quarter Results. (2012). Abbott.com. Retrieved from: http://www.abbott.com/news-media/press-releases/abbott-reports-strong-second-quarter-results.htm
Medtronic. (2012). Stock Charts. Retrieved from: http://stockcharts.com/h-sc/ui
Medtronic. (2012). Yahoo Finance. Retrieved from: http://finance.yahoo.com/q/pr?s=MDT+Profile
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