Gilead Sciences, Inc. (NASDAQ:GILD) and Medtronic plc (NYSE:MDT) both combine growing healthcare businesses with regular cash returns to shareholders, but the sources of that growth look very different.
Gilead is being propelled by its dominant HIV portfolio, where several products are expanding rapidly. On the other hand, Medtronic’s growth is spread across a much broader collection of medical technologies, and its latest results suggest that newer products are beginning to accelerate growth across multiple businesses.
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For income investors, the comparison is equally interesting. Gilead raised its quarterly dividend 3.8% for 2026, while Medtronic has increased its annual dividend for 49 consecutive years.
Bull Case
Gilead’s (NASDAQ:GILD) underlying business delivered another strong quarter. Second-quarter product sales excluding Veklury increased 10% to $7.6 billion, while HIV sales grew 12% to $5.7 billion. Biktarvy revenue increased 7% to $3.8 billion, and Descovy jumped 48% to $967 million. Yeztugo, which is Gilead’s twice-yearly injectable HIV prevention medicine, generated another $232 million compared with $15 million a year earlier.
There was growth outside HIV as well, with liver-disease sales increasing 10% to $877 million. Livdelzi revenue more than doubled from $78 million to $167 million, and Trodelvy sales increased 26% to $457 million. Gilead subsequently raised its 2026 product-sales guidance to $30.1 billion-$30.4 billion and increased its outlook for product sales excluding Veklury to $29.8 billion-$30.1 billion. The company is also returning cash to shareholders and increased its quarterly dividend by 3.8% to $0.82 per share beginning in 2026.
Medtronic’s growth story has also strengthened considerably. After delivering its strongest annual top-line growth in a decade in FY2026, the company reported $9.76 billion of revenue in Q1 FY2027, up 13.7% organically. The comparison benefited from an extra fiscal week, which Medtronic estimated added approximately $570 million, but strength was also visible across its major businesses.
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Cardiovascular grew 18.9% organically, Neuroscience increased 9.3%, and Medical Surgical rose 10.2%. Cardiac Ablation Solutions continued to stand out, growing 88%, while Cranial and Spinal Technologies increased 13%. Medtronic subsequently raised its FY2027 organic revenue-growth outlook to 7.25%-7.75% from 6.75%-7.25% and increased the lower end of its non-GAAP EPS guidance, taking the range to $5.94-$6.00. Its income credentials are also difficult to ignore, as the company increased its quarterly dividend to $0.72 per share for FY2027, implying $2.88 annually, and marked its 49th consecutive year of dividend increases.
Bear Case
Gilead’s growth comes with substantial concentration, as can be seen in its HIV business, which generated $5.69 billion of its $7.63 billion in Q2 product sales, meaning roughly three-quarters of product revenue came from one therapeutic area. That franchise is performing strongly today, but the company’s dependence on it remains considerable.
In addition, Gilead recorded $11.2 billion of acquired in-process R&D expenses in Q2, primarily associated with its acquisitions of Arcellx, Tubulis, and Ouro Medicines, which means that diversification has also required considerable investment. Those transactions contributed to GAAP and non-GAAP losses per share of $8.45 and $6.75, respectively. The company’s existing oncology businesses aren’t moving uniformly higher either. Trodelvy grew 26%, but Cell Therapy sales declined 14% to $417 million amid competitive headwinds. Yescarta sales fell 12%, while Tecartus declined 24%.
On the other hand, Medtronic’s (NYSE:MDT) latest 13.7% organic growth rate overstates the underlying pace investors should expect because Q1 FY2027 contained an extra fiscal week. The company itself estimated that the additional week benefited organic revenue by approximately $570 million. The longer-term earnings picture also still needs to catch up with the acceleration in revenue. In FY2026, organic revenue increased 5.8%, but non-GAAP EPS increased only 0.7% to $5.53, and non-GAAP operating margin declined 130 basis points.
Q1 FY2027 was more encouraging, with non-GAAP EPS increasing 15.1% to $1.45 and non-GAAP operating margin expanding 10 basis points to 23.7%. Investors will now need to see whether that improvement persists as Medtronic works toward its higher full-year guidance.
Conclusion
Gilead and Medtronic are offering income investors two distinctly different growth profiles. Gilead has the stronger pharmaceutical momentum. Its non-Veklury product sales grew 10%, HIV increased 12%, several newer products are expanding quickly, and management raised its 2026 sales outlook. The trade-off is that roughly three-quarters of product sales still come from HIV, while attempts to build businesses beyond that franchise have required significant investment.
Medtronic’s growth, on the other hand, is more diversified. Its latest quarter showed strength across Cardiovascular, Neuroscience and Medical Surgical, and management raised its FY2027 revenue and earnings outlook. Its 49-year record of annual dividend increases also gives income investors a much longer history of consistent dividend growth.
Gilead therefore offers faster underlying growth today, but with greater therapeutic concentration. Medtronic combines a broader growth base with a substantially longer dividend-growth record, although it still needs to demonstrate that its recent revenue acceleration can translate into sustained earnings and margin improvement.
For investors weighing both growth and income, the choice ultimately rests on whether Gilead’s stronger current operating momentum outweighs Medtronic’s greater diversification and longer record of dividend increases.
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This article is originally published at Insider Monkey.
