Medtronic (MDT) Raises Quarterly Dividend 25% to 38c/Share; Adds 80M Common Stock to Buyback Plan

Medtronic (NYSE: MDT) declared a quarterly dividend of $0.38 per share, or $1.52 annualized. This is a 24.6% increase from the prior dividend of $0.305.

The dividend will be payable on July 17, 2015, to stockholders of record on June 29, 2015, with an ex-dividend date of June 25, 2015.

The annual yield on the dividend is 2 percent.

Today's increase brings Medtronic's dividend per share payout ratio to approximately 35 percent of current fiscal year 2016 estimated adjusted diluted earnings per share. In addition to expecting to increase its dividend over time based on underlying earnings growth, Medtronic is targeting a dividend per share payout ratio of 40 percent within the next few years.

"This substantial increase in our dividend and expectation to increase our dividend payout ratio within the next few years reflects our increased financial flexibility to deploy our cash and the confidence the board and our management team have in our business, as well as solidifies our ongoing commitment to our shareholders," said Omar Ishrak, Medtronic chairman and chief executive officer. "We remain focused on disciplined capital allocation and creating long-term shareholder value. We are committed to returning 50 percent of our free cash flow to our shareholders, with an emphasis on delivering dependable, long-term dividend growth."

In addition to increasing the dividend, the board today approved the authorization of an additional 80 million ordinary shares, which represents approximately 6 percent of the company's total basic shares outstanding, to be purchased under Medtronic's Share Repurchase Plan. There is no specific time period associated with the plan. Over the past 5 years, Medtronic has repurchased $8.3 billion of its outstanding shares, or 176 million shares, which contributed approximately 10 percent to the reduction in the company's outstanding shares prior to the acquisition of Covidien last quarter.

For a dividend history and other dividend-related data on Medtronic (MDT) click here.

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