Wall Street Isn't Talking About High-Yield Medtronic Stock -- Here's Why It Should Be

Medtronic (NYSE: MDT) is kind of a boring business. Sure, it is one of the world's largest medical device makers, but its diversified portfolio tends to mask the exciting developments taking place in the business. But management has managed to turn this industry leader in a more attractive direction. Here's why Wall Street should be talking a lot more about Medtronic.

Medtronic got a little bloated

To be fair, Medtronic's size works against it. In fact, after decades of success, the company became bogged down by excessive bureaucracy and too many business lines. It has been around a long time, noting its incredible 48-year streak of annual dividend increases (two away from Dividend King status), so this isn't really a shocking development. But it does lead investors to ignore a stock, as they focus on more exciting, focused, and smaller businesses, like surgical robotics pioneer Intuitive Surgical (NASDAQ: ISRG).

Image source: Getty Images.

What's notable is that Medtronic has made strategic shifts to regain its growth mojo. That's included exiting less desirable businesses and investing in new technology. For example, it spun off its diabetes business, which was growing quickly but wasn't particularly profitable. And it recently launched its Hugo surgical robot in the U.S. market, taking on Intuitive Surgical, a company that gets a lot more attention on Wall Street. While Hugo is just one of many new products that Medtronic has in the works, it highlights Medtronic's ability to develop cutting-edge technology in the medical device space.

In fact, the changes the company made allowed it to report its highest annual revenue growth in a decade in fiscal 2026. In the first quarter of fiscal 2027, the company's revenues jumped 13.7%, with earnings coming in above guidance. In fact, management was so confident about the future that it increased its full-year guidance for fiscal 2027 after just one quarter.

That's not to suggest that Medtronic will suddenly become a growth stock. But the tide appears to have turned. It is no longer a business working through a turnaround; it looks like one that has passed an important inflection point. Now add in a well-above-market dividend yield, and even conservative dividend investors should probably give this medical device giant a second look.

Wall Street is starting to wake up to Medtronic

That said, Medtronic's stock has risen 15% over the past three months, as of this writing. Investors are starting to notice the improvement in the business. But the stock is still 30% below its 2021 high, suggesting there's more recovery room ahead. But don't wait too long, or you may miss the opportunity to buy this industry-leading company while it is still offering a historically high yield.

Reuben Gregg Brewer has positions in Medtronic. The Motley Fool has positions in and recommends Intuitive Surgical and Medtronic. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.