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.
Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical, Johnson & Johnson, and MAKO Surgical. The Motley Fool owns shares of Intuitive Surgical and Johnson & Johnson.
The article Is a Huge Share Buyback The Cure For This Healthcare Stock? originally appeared on Fool.com.
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