Medtronic Cash Dividend Offers 1.8% Yield

Medtronic plc MDT revealed Friday its board approved a 13 percent increase in its quarterly cash dividend. As a result, it would pay $0.43 per share as a quarterly dividend offering a yield of 1.8 percent. This would translate into an annual amount of $1.72 per ordinary share.

The company claimed the latest announcement marked the 39th straight year of dividend increase. It is an S&P 500 component. The company's dividend has nearly quadrupled in the last one decade with the latest increase. Also, the current announcement meant that the dividend provided 18 percent compounded annual growth pace in the last 39 years.

Medtronic's chairman and CEO, Omar Ishrak, said, "Today's double-digit increase in our dividend reflects the confidence the board and our management team has in Medtronic's ability to deliver consistent and sustainable growth, as well as to generate significant and increasingly accessible free cash flow."

He continued, "We are deploying considerable amounts of capital strategically, consistently, and with discipline to provide attractive returns for our shareholders. This includes our focus on delivering dependable, long-term growth in our dividend."

The company said its dividend payout ratio reached 40 percent. It remained committed to returning at least 50 percent of its free cash flow by way of dividend and share buyback to its shareholders.

The stock traded 2.29 percent down on Friday.