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Medtronic Owner Earnings per Share (TTM)

: 4.05 (As of Jul. 2022)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Medtronic's Owner Earnings per Share (TTM) ended in Jul. 2022 was $4.05. It's Price-to-Owner-Earnings ratio for today is 20.39.


The historical rank and industry rank for Medtronic's Owner Earnings per Share (TTM) or its related term are showing as below:

MDT' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 9.24   Med: 24.4   Max: 42.97
Current: 20.37


During the past 13 years, the highest Price-to-Owner-Earnings ratio of Medtronic was 42.97. The lowest was 9.24. And the median was 24.40.


MDT's Price-to-Owner-Earnings is ranked better than
58.96% of 251 companies
in the Medical Devices & Instruments industry
Industry Median: 25.57 vs MDT: 20.37

Medtronic's Earnings per Share (Diluted) for the three months ended in Jul. 2022 was $0.70. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jul. 2022 was $3.87. It's PE Ratio ratio for today is 21.34.

Medtronic's EPS without NRI for the three months ended in Jul. 2022 was $0.70. Its EPS without NRI for the trailing twelve months (TTM) ended in Jul. 2022 was $3.87. It's PE Ratio without NRI ratio for today is 21.34.


Medtronic Owner Earnings per Share (TTM) Historical Data

The historical data trend for Medtronic's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Medtronic Annual Data
Trend Apr13 Apr14 Apr15 Apr16 Apr17 Apr18 Apr19 Apr20 Apr21 Apr22
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.84 3.70 3.83 3.05 3.85

Medtronic Quarterly Data
Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.40 3.60 3.58 3.85 4.05

Competitive Comparison

For the Medical Devices subindustry, Medtronic's Owner Earnings per Share (TTM), along with its competitors' market caps and Owner Earnings per Share (TTM) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Medtronic Owner Earnings per Share (TTM) Distribution

For the Medical Devices & Instruments industry and Healthcare sector, Medtronic's Owner Earnings per Share (TTM) distribution charts can be found below:

* The bar in red indicates where Medtronic's Owner Earnings per Share (TTM) falls into.



Medtronic Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Medtronic's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 5,205
Depreciation, Depletion and Amortization 2,704
Change In Deferred Tax -611
5Y Average of Maintenance Capital Expenditure 1,105
Change In Working Capital -786
Shares Outstanding (Diluted Average) 1,335

1. Start with "Net Income" from income statement. Medtronic's Net Income for the trailing twelve months (TTM) ended in Jul. 2022 was $5,205 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Medtronic's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Jul. 2022 was $2,704 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Medtronic's Change In Deferred Tax for the trailing twelve months (TTM) ended in Jul. 2022 was $-611 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $1,105 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Medtronic's 5-Year Average Maintenance Capital Expenditure = $1,105 Mil

5. "Change In Working Capital" is from cashflow statement. Medtronic's Change In Working Capital for the trailing twelve months (TTM) ended in Jul. 2022 was $-786 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Medtronic's Shares Outstanding (Diluted Average) for the months ended in Jul. 2022 was 1334.500 Mil.

Medtronic's Onwer Earnings Per Share for Jul. 2022 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 5205 +2704+-611
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-1105.2810967815+-786)/1334.500
=4.05

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=82.59/4.05
=20.39

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Medtronic Owner Earnings per Share (TTM) Related Terms

Thank you for viewing the detailed overview of Medtronic's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.


Medtronic Business Description

Medtronic logo
Address
Lower Hatch Street, 20 On Hatch, Dublin, IRL, 2
One of the largest medical device companies, Medtronic develops and manufactures therapeutic medical devices for chronic diseases. Its portfolio includes pacemakers, defibrillators, heart valves, stents, insulin pumps, spinal fixation devices, neurovascular products, advanced energy, and surgical tools. The company markets its products to healthcare institutions and physicians in the United States and overseas. Foreign sales account for almost 50% of the company's total sales.
Executives
Fong Ivan K officer: EVP GENERAL COUNSEL & SECR 3M CENTER ST. PAUL MN 55144-1000
Kirk Jennifer M officer: Chief Accounting Officer 5 GREENWAY PLAZA SUITE 110 HOUSTON TX 77046
Lofton Kevin E director GILEAD SCIENCES, INC. 333 LAKESIDE DRIVE FOSTER CITY CA 94404
Wall Brett A. officer: EVP & Group Pres Restora Thera 710 MEDTRONIC PARKWAY LC300 MINNEAPOLIS MN 55432
Salmon Sean officer: EVP & Group President Diabetes MEDTRONIC PLC, 710 MEDTRONIC PARKWAY LC300 MINNEAPOLIS MN 55432
Goldsmith Andrea Jo director 1220 AUGUSTA DRIVE SUITE 600 HOUSTON TX 77057
Liddicoat John R officer: EVP & President of Americas MEDTRONIC PLC 710 MEDTRONIC PKWY, MS LC300 MINNEAPOLIS MN 55432
White Robert John officer: EVP & President MITG MEDTRONIC PLC 710 MEDTRONIC PKWY MS LC300 MINNEAPOLIS MN 55432
Parkhill Karen L officer: EVP & Chief Financial Officer 1717 MAIN STREET, MC 6402 DALLAS TX 75201
Reddy Preetha director APOLLO HOSPITALS 21 GREAMS LN, OFF GREAMS RD CHENNAI K7 600006
Ellis Gary Lee officer: EVP & Chief Financial Officer THE TORO COMPANY 8111 LYNDALE AVENUE SOUTH BLOOMINGTON MN 55420
Hanson Bryan C officer: EVP AND PRESIDENT, COVIDIEN ZIMMER BIOMET HOLDINGS 345 E. MAIN STREET WARSAW IN 46580
Hakami Hooman officer: EVP & Group President Diabetes 710 MEDTRONIC PKWY MSLC300 MINNEAPOLIS MN 55432
Oconnell Christopher J officer: See Remarks MEDTRONIC, INC. 710 MEDTRONIC PKWY MINNEAPOLIS MN 55432
Lenehan James T director C/O MEDTRONIC INC 710 MEDTRONIC PKWY MS LC300 MINNEAPOLIS MN 55432

Medtronic Headlines

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