Medtronic plc (NYSE:MDT) is now just one dividend increase away from becoming a Dividend King. It has raised its payout for 49 straight years, putting the company right at the doorstep of the 50-year milestone.
Medtronic raised its quarterly dividend to $0.72 per share in June 2026, bringing the annual payout to $2.88. At a share price of around $91, that works out to a yield of about 3.2%. For a large healthcare company with such a long dividend record, that is a solid income return.
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A Dividend Backed by a Long Track Record
The dividend track record is one of the main reasons investors pay attention to Medtronic plc (NYSE:MDT). The company has kept raising its payout through recessions, changes in healthcare policy, and periods when its own growth was less impressive.
The latest increase was modest at about 1.4%. It is not the kind of raise that will dramatically change an investor’s income, but Medtronic still increased the payout while investing in the business. For long-term income investors, that consistency matters.
The appeal here is not really fast dividend growth. It is the reliability of the payout. A yield of roughly 3%, along with the potential for another increase each year, gives income investors a dependable starting point for building income over time.
Cash Flow Gives the Dividend Plenty of Support
Cash flow is another big part of the dividend story. In fiscal 2026, Medtronic generated $7.33 billion in operating cash flow, up 4.1% from the previous year. Free cash flow came to $5.43 billion, up 4.6%. The company paid roughly $3.64 billion in dividends, so free cash flow covered the payout comfortably.
That left money available for other priorities, including capital spending, acquisitions, debt reduction and share buybacks. Medtronic plc (NYSE:MDT) ended fiscal 2026 with about $9.2 billion in cash and investments. The company does carry debt, but its recurring cash generation gives it enough flexibility to support the dividend while continuing to fund the business.
The Growth Story Is Starting to Look Better
What makes the dividend story more interesting is the improvement in the underlying business. Revenue rose 8.4% to $36.4 billion in fiscal 2026, marking Medtronic’s strongest annual revenue growth in a decade. Organic revenue increased 5.8%.
Several newer businesses could also become bigger contributors in the years ahead. Management has highlighted Affera, Symplicity, Hugo, Altaviva and Stealth AXiS as important growth opportunities. Cardiac ablation was a particularly strong area. Revenue from Cardiac Ablation Solutions jumped 78% globally in the fourth quarter, while US revenue surged 124%.
That kind of growth matters to dividend investors because stronger revenue can eventually lead to higher earnings and free cash flow. If Medtronic plc (NYSE:MDT) can maintain the momentum, it could eventually have more room for larger dividend increases.
Fiscal 2027 Could Provide Another Step Forward
Medtronic plc (NYSE:MDT) is also entering fiscal 2027 with a fairly strong outlook. Management expects organic revenue growth of 6.75% to 7.25% and adjusted EPS of $5.90 to $6.00, which would represent growth of 6.7% to 8.5%. That is encouraging for the dividend.
Medtronic does not need double-digit earnings growth to support its current dividend. Based on the $2.88 annualized payout, the projected fiscal 2027 EPS range puts the payout ratio at roughly 48% to 49%. That leaves plenty of room for the company to keep raising the dividend while retaining cash to invest in the business.
The Path to Dividend King Status Looks Clear
Medtronic plc (NYSE:MDT)’s dividend case is becoming harder to overlook. Medtronic already has 49 years of dividend increases behind it and continues to generate billions of dollars in free cash flow. The latest raise brought the annualized payout to $2.88 per share, while management expects the business to keep growing in fiscal 2027.
Recent results also suggest that the business is moving in a better direction. Revenue growth has picked up, newer medical technologies are gaining traction, and management expects earnings to grow at a mid- to high-single-digit rate in fiscal 2027.
For dividend investors, the combination is attractive: an established healthcare business, a roughly 3% yield, dependable cash generation, and a dividend record that is only one increase away from 50 consecutive years.
Conclusion
Medtronic plc (NYSE:MDT) looks well positioned as a long-term income investment. The dividend is not growing quickly right now, but the yield, long history, and strong cash-flow coverage provide a solid base for shareholders. The bigger point is that the business itself is showing signs of better momentum. If Medtronic can maintain that progress in cardiac care, surgical technologies, and its newer businesses, earnings and free cash flow could continue to grow.
That would give Medtronic more room to raise its dividend while still investing in future growth. Medtronic has already built a 49-year dividend record and is now one increase away from becoming a Dividend King. The more important point is what comes after that milestone. With solid cash flow and a business that is showing better growth, Medtronic appears to have the foundation to keep increasing its dividend for years to come.
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Disclosure: None. This article is originally published at Insider Monkey.
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