Medtronic was founded in Minnesota in 1949 and is the world’s largest medical device company with a market capitalization of $150.75 billion. It is a top holding of the Harvest Healthcare Leaders Income ETF (HHL:TSX, HHL.U:TSX).
About 10% of Medtronic’s 86,000 employees are research scientists which ensures a steady stream of new products. This R&D edge contributes to Medtronic’s dominance in four areas where it operates. This includes heart management devices, such as pacemakers, which account for about 40% of sales.
Medtronic has been in the news recently.
In January 2020, it received Food and Drug Administration (FDA) approval for its Micra AV pacemaker. The pacemaker is the smallest in the world – about 20 times smaller than a conventional device with a battery that lasts twice as long. It is also one of the few pacemakers available without lead which means fewer infections and complications.
The pacemaker treats a condition where the electrical signals in the heart are partially or completely blocked.
Because of this type of innovation, Medtronic was named to Fortune’s list of the World’s Most Admired Companies for 2020. It was 209th of the top 1,000 overall and 2nd in the Medical Products and Equipment industry on the Forbes list.
As of Dec. 31, 2019, the Harvest Healthcare Leaders Income ETF held 20 of the largest global healthcare companies with an average market capitalization of $183 billion CAD.
About 42 per cent of the holdings of HHL are in pharmaceuticals, 20 per cent in biotechnology, 19 per cent in healthcare equipment and supplies and 16 per cent are healthcare providers.
The ETF’s portfolio has an average dividend yield of 1.93% and a current distribution yield of 8.65% which is enhanced by Harvest’s covered call strategy. The ETF’s 5-year return on equity is 18.95%.
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The views and/or opinions expressed in the article are of a general nature and are for informational purposes only. Article contents should not be considered as advice and/or a recommendation to purchase or sell the mentioned securities or used to engage in personal investment strategies. Investors should consult their investment advisor before making any investment decision.