The Best Stock in Minnesota: Medtronic
We analyzed publicly traded companies based in the North Star State to identify the best stock in Minnesota to buy now.
A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.
Medtronic by the Numbers
- Headquarters: Minneapolis
- Share price: $89.09
- Market value: $122.0 billion
- Price-earnings ratio: 18
(Prices and data are as of June 22, 2017)
Medtronic is reshuffling its business lines, joining forces with fast-growing partners and jettisoning laggards. In January 2015, Medtronic, which specializes in therapeutic medical devices such as pacemakers, defibrillators and stents, acquired Covidien, a leader in minimally invasive surgical devices.
With the acquisition, says CFRA analyst Jeffrey Loo, Medtronic becomes a worldwide leader in a diverse array of medical products. Then, in April, Medtronic agreed to sell its hospital-supply business, which focused on patient-care products, to Cardinal Health. Medtronic will use $1 billion of the after-tax proceeds to buy back shares, and it will pay down debt with the remaining $4.5 billion. Analysts at UBS say the sale exemplifies Medtronic’s commitment to selling its less profitable, slower-growing business segments in favor of higher-growth opportunities. The company has also committed to spending $10 billion on research and development in the U.S. through 2024. CFRA’s Loo says the stock is a “buy” and reckons it could reach a price of $100 a share over the next 12 months.