Intuitive Surgical, Inc. (ISRG): Is a Huge Share Buyback The Cure For This Healthcare Stock?

Alternatively, investors could consider healthcare behemoth Johnson & Johnson (NYSE:JNJ). The company behind Listerine mouthwash and Band-Aids also has a significant medical devices segment. J&J can offer investors exposure to the lucrative surgical device market with the added safety of strong consumer brands.

J&J has a market capitalization in excess of $260 billion. Moreover, Johnson & Johnson (NYSE:JNJ) is the gold standard among dividend payers. Whereas Intuitive Surgical, Inc. (NASDAQ:ISRG) does not pay a dividend to shareholders, J&J has a dividend track record that is tough to beat. J&J recently raised its dividend for the 51st consecutive year, and the company’s current yield stands near a healthy 3%.

The Foolish conclusion

I believe Intuitive Surgical, Inc. (NASDAQ:ISRG)’s buyback is a genuine effort at providing shareholders a meaningful dose of downside protection. Shareholders have taken it on the chin in recent months, and the company’s massive buyback authorization should help boost earnings per share, and consequently, put a floor under the stock price.

What does still concern me is the over-hanging doubt as to the safety of the da Vinci robot. While reports of deaths and complications due to the surgical robots are no small matter, I continue to believe the da Vinci robot represents a truly revolutionary technology.

As Warren Buffett said, investors should be greedy when others are fearful. The market is clearly fearful about the fate of Intuitive Surgical, Inc. (NASDAQ:ISRG), but at a price under $400 per share and the backing of a $1.5 billion buyback, the stock is likely much closer to its bottom than to its top.

The article Is a Huge Share Buyback The Cure For This Healthcare Stock? originally appeared on Fool.com.

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