Smith & Nephew Tops Shortlist of High-Yield Device Firms
August 20, 2013
While growth potential is strong across the medical device industry, several companies stand out as superstars, according to Motley Fool analyst Sean Williams. Williams created a roundup of three high-yield medical device companies. A high-yield stock is defined as having a dividend yield exceeding the yield of benchmark averages such as the 10-year Treasury note (ICAPSD:10_YEAR) yield.
1. Smith & Nephew has a 2.6% projected forward yield. The company manufactures a variety of reconstructive implants for orthopedic knees. This includes knee replacements and hip replacements. The company also maintains a product line of wound management devices for infection prevention. This includes both the Acticoat and Durafiber brands.
In its latest earnings report, the company reported very strong growth in emerging markets. While Europe yielded flat results, the company's sports medicine segment increased by 6%.
2. With a 2% projected forward yield, Medtronic is faring relatively well in 2013. The company manufactures restorative therapy goods like implantable spinal devices. In addition, the company provides implants for cardiovascular devices like heart valves, pacemakers and other replacement technologies. For Medtronic, emerging markets is key. During its last quarter, the company defibrillator and pacemaker product lines increased by 3%. In addition, neuromodulation and spinal treatments have seen a respective rise of 6% and 1%.
In terms of dividends, the company has also been a straight shooter. As of now, it has managed to boost its annual dividend for 36 years. Over the past nine years, the average payment to stockholders increased 234%.
3. As with Medtronic, ResMed also has a 2% projected forward yield. The company manufacturers medical equipment for the diagnosis and treatment of sleeping disorders. While growth at other med tech giants like Medtronic and Smith & Nephew has been slightly flat in recent times, ResMed has achieved a whopping $414.6 million in total revenues this past quarter. The Asia Pacific / European segment revenue increased by 12%. The company's revenue in the United States rose by 11%.
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