Medtronic Analysis Company Overview

Medtronic, Inc. is one of the world's leading suppliers of medical technologies used in a variety of therapies and procedures in hospitals, private practice offices, and other medical settings (Medtronic, 2012; Yahoo Finance, 2012). As many of their products, especially some of those that are more profitable to the company, are generally associated with aging and medical conditions that become more common and/or severe with age, the company would seem to be a solid investment in the coming years as the "baby boomer" generation ages (Yahoo Finance, 2012). Determining whether or not this is truly the case requires a financial analysis of the company as well, however. This analysis, broken down into areas of risk, return, and equity valuation, is presented below, with a conclusion providing a summary of the findings and the current advisability of Medtronic, Inc. As an investment opportunity.

Risk

Given the company's strong sales and fiscal performance over the more-than-half-century of its existence, there is relatively little risk associated with this investment, and stock increases (assuming the overall industry/economic environment remains stable) will almost certainly exceed inflation...

Certain indicators within the company do raise some cause for concern, however the stock is priced more attractively than in some time, which further increases the reward potential and reduces the overall risk burden (Medtronic, 2012). Overall, this stock should be considered low-risk.
Return

As stated above, the return on an investment in this company is almost certain to be higher than the rate on "risk-free" investments such as U.S. Treasury bonds, and due to the drop in price now is an especially attractive time to invest in this company from a returns perspective (Yahoo Finance, 2012). Currently trading at a price-to-earnings ratio of under thirteen compared to more than eighteen just three years ago, the expected return on continued ownership of the stock is likely to be substantial (Yahoo Finance, 2012). This is true not only in terms of gains in the stock price and the potential for a split in the not-too-distant future, but also in the regular dividends paid out and the increasing value of the company's earnings and these dividends (Medtronic, 2012; Yahoo Finance, 2012). Given the relatively low risk, the return prospects for this stock are quite attractive…