On Thursday, by the way, S&P 500 component Medtronic (MDT) raised its quarterly common payout for the 23rd consecutive year, to 20.5 cents a share, up 9% from 18.75 cents, for a 2.42% yield. It also added 60 million shares to its stock-buyback authorization. For fiscal 2009, ended April 30, the medical-device manufacturer had $3.9 billion in operating cash flow and returned $1.6 billion to investors via dividends and buybacks. Since the buyback boom began in 2004's fourth quarter, S&P 500 companies have spent $1.8 trillion on repurchases, versus $2 trillion on capital expenditures and $1 trillion on dividends.

declared a 9 percent increase in its cash dividend for fiscal year 2010, raising the quarterly amount to 20.5 cents per share of the company's common stock, for an annual amount of 82 cents per share.

At $33.50, Medtronic stock is trading at a 10-year low, and a cheap multiple. It could rally into the mid-40's if the company offers encouraging guidance about fiscal 2010-and delivers.

At the moment, Frels' favorite sector is health care, which accounts for about 20% of the fund's assets, and is represented by Medtronic (MDT) and St. Jude Medical (STJ). The money manager says Medtronic could grow its earnings by 11% annually over the long term, earn $2.95 a share this year (versus $2.60 in '08), and trade at nine times forward earnings. Currently priced at 30, Frels believes the stock could hit 60 over three years.

The one thing Corbin fears is fresh trouble in the banking system and another round of selloffs in financial shares. For now, his favorite stocks are UPS (UPS), Pfizer and Medtronic (MDT). "These companies have low price/earnings ratios and decent yields, and franchises that are unlikely to be damaged in a downturn," he says.

Focus List - Price 34.30 on Feb. 18
by McAdams Wright Ragen

Medtronic reported fiscal 3Q revenue of $3.5 billion and earnings of 71 cents a share, effectively in line with consensus and our outlook. MDT's cardiac-rhythm disease-management segment experienced a 4% decline in sales from a year ago, and likely lost some market share [to] competitive product launches. All other segments, minus physio-control, posted positive sales comparisons. Medtronic's balance sheet is sound, at 15% net debt to total capital; MDT generated more than $1 billion of free cash flow in 3Q. We are increasing our FY09 earnings estimate from $2.88 to $2.92 as a result of higher gross-margin assumptions. The 45 target is based on the shares trading at 14 times earnings. Market cap: $38.3 billion.

demographics

From a recent Mad Money show:"That one has suffered a severe beat down. I think that whole group is in trouble. If I was going there, I'd look at biotech and Celgene (CELG)."

Stryker Not Worth Chasing: David Peltier, portfolio manager for TheStreet.com Value Investor newsletter, advises against buying shares of medical device maker Stryker at these levels, despite the firm's top-line growth and the overall aging of America.
Click here to watch the video.

PE of 24, a PEG of 1.28, and it pays a yield of 1.5%.

Too high of a P/E. Lots of growth potential but possibly overvalued.

just sits there

Lost 15% and sold it. Stock is still underperforming. Has never recovered

Is exposed to problems with certain medical devices .

flat for last few years

own

This industry seemed hot at one time, it has been flat for quite some time. Another dividend paying stock.