About the Editor

David Harrell is the editor of Morningstar DividendInvestor, a monthly newsletter that highlights activities pertaining to a Morningstar, Inc. account invested in accordance with a strategy that takes a concentrated, best-ideas approach when investing in select common stocks of dividend-paying companies and other securities. The strategy seeks firms with wide or narrow moats that we believe are in a stronger competitive position than their peers and that are trading at a reasonable price.

David served in several senior research and product development roles and was part of the editorial team that created and launched Morningstar.com. He was the co-inventor of Morningstar's first investment advice software. David joined Morningstar in 1994. He holds a bachelor's degree in biology from Skidmore College and a master's degree in biology from the University of Illinois at Springfield.

Our Portfolio Manager

George Metrou is an equity portfolio manager for Mornigstar Investment Management LLC. Metrou joined the team as a portfolio manager in August 2018. Before joining Morningstar Investment Management, he was an equity portfolio manager with Perritt Capital, and as a portfolio manager with Perritt Capital Management. Prior to that he served as Director of Research and as an equity analyst at Perritt Capital, and as a portfolio manager with Windgate Wealth Management. He holds a Bachelor's degree in finance form DePaul University, and he also holds the Chartered Financial Analyst® designation.

 
Investment Strategy

Dividends are for everyone regardless of age. The outcome of owning dividend-yielding stocks is the key variable-higher-yielding stocks with safe payouts being less risky while affording investors who don't need current income the ability to reinvest/reallocate the capital.

The goal of the Dividend Select Portfolios is to earn annual returns of 8% - 10% over any three-to-five year rolling time horizon. We further seek to minimize risk, as defined by the probability of a permanent loss of capital. For our portfolio as a whole, this goal is composed of:

3% - 5% current yield
4% - 6% annual income growth

 
About Josh Editor's Photo
David Harrell
Editor, Morningstar DividendInvestor
David Harrell is the editor of Morningstar DividendInvestor, a monthly newsletter that highlights activities pertaining to a Morningstar, Inc. account invested in accordance with a strategy that takes a concentrated, best-ideas approach
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A Fair Value Reduction for Medtronic -- The Week in Dividends 2022-11-23
From the DividendInvestor news file for the shortened holiday week:

Please see a new analyst note below from Morningstar Research Services for Medtronic MDT.

Happy Thanksgiving!

David Harrell
Editor, Morningstar DividendInvestor



News and Research for Dividend Select Portfolio Holdings

Medtronic Posts Disappointing Fiscal Second Quarter; Lowering Our Fair Value Estimate
by Debbie S. Wang | Morningstar Research Services LLC | 11-22-22

Medtronic delivered disappointing fiscal second-quarter results, and we're lowering our fair value estimate to $112 per share, down from $122, after adjusting our full-year and fiscal 2024 estimates downward. In the second quarter, the firm faced challenges that have dragged down growth, some of which were specific to the firm and others that have affected the entire industry. In the former bucket, Medtronic struggled with supply shortages in surgical innovations, delayed U.S. regulatory approval of the 780g insulin pump, and battery replacement headwinds in neuromodulation. In the latter bucket, unfavorable foreign exchange rate changes, higher input costs, hospital staffing issues that have pulled down procedure volume, and China's volume-based procurement, or VBP, program have also put pressure on Medtronic. Considering these issues are unlikely to resolve themselves within the next few quarters, we've pulled back our projections for fiscal 2023-24. Despite these short-term hurdles, we think Medtronic's wide economic moat remains intact, as its intangible assets and switching costs have not weakened, in our view.

The quarterly growth of 2.5% in constant currency was fueled by structural heart and specialty therapies. Most other divisions posted low-single-digit growth in constant currency, which presented incremental progress from first quarter but falls short of the medical technology market growth around 5%. Management has had two years, albeit under pandemic conditions, to put the pieces in place for a return to market growth at Medtronic. As COVID-19 recedes, we're looking for signs of some businesses to bounce back over the ensuing quarters. However, we recognize that management's emphasis on generating innovation often takes longer to bear fruit. Considering we've seen it take rivals about three years to rev up and commercialize a new product cycle, we're watching for signs of success in fiscal 2024.

Investment research is produced and issued by subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC, registered with and governed by the U.S. Securities and Exchange Commission. Analyst ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst ratings are based on Morningstar’s analysts’ current expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst ratings are not guarantees nor should they be viewed as an assessment of a stock's creditworthiness. Ratings, analysis, and other analyst thoughts are provided for informational purposes only; references to securities should not be considered an offer or solicitation to buy or sell the securities.

©2022 Morningstar, Inc. All rights reserved. The Morningstar name and logo are registered marks of Morningstar, Inc. The information contained in this document is the proprietary material of Morningstar, Inc. Reproduction, transcription, or other use, by any means, in whole or in part, without the prior written consent of Morningstar, Inc., is prohibited. All data presented is based on the most recent information available to Morningstar, Inc. as of the release date and may or may not be an accurate reflection of current data.  There is no assurance that the data will remain the same.

Disclosure: The commentary, analysis, references to, and performance information contained within Morningstar® DividendInvestor℠, except where explicitly noted, reflects that of portfolios owned by Morningstar, Inc. that are invested in accordance with the Dividend Select strategy managed by Morningstar Investment Management LLC, a registered investment adviser and subsidiary of Morningstar, Inc. References to "Morningstar" refer to Morningstar, Inc. and/or, where applicable, its affiliates.

Opinions expressed are as of the current date and are subject to change without notice. Morningstar, Inc. and Morningstar Investment Management LLC shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, the information, data, analyses or opinions or their use. This commentary is for informational purposes only and has not been tailored to suit any individual.

The information, data, analyses, and opinions presented herein do not constitute investment advice, are provided as of the date written, are provided solely for informational purposes and therefore are not an offer to buy or sell a security. Please note that references to specific securities or other investment options within this piece should not be considered an offer (as defined by the Securities and Exchange Act) to purchase or sell that specific investment.

This commentary contains certain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially and/or substantially from any future results, performance or achievements expressed or implied by those projected in the forward-looking statements for any reason.

Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Securities in this report are not FDIC-insured, may lose value, and are not guaranteed by a bank or other financial institution. Before making any investment decision, investors should read and consider all the relevant investment product information. Investors should seriously consider if the investment is suitable for them by referencing their own financial position, investment objectives, and risk profile before making any investment decision. There can be no assurance that any financial strategy will be successful.

Common stocks are typically subject to greater fluctuations in market value than other asset classes as a result of factors such as a company's business performance, investor perceptions, stock market trends and general economic conditions.

All Morningstar Stock Analyst Notes were published by Morningstar, Inc. The Week in Dividends contains all Analyst Notes that relate to holdings in Morningstar, Inc.'s Dividend Select Portfolio. Morningstar’s analysts are employed by Morningstar, Inc. or its subsidiaries. In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission.

 
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Contact Your Editor
 
About the Editor


David Harrell is the editor of Morningstar DividendInvestor, a monthly newsletter that highlights activities pertaining to a Morningstar, Inc. account invested in accordance with a strategy that takes a concentrated, best-ideas approach when investing in select common stocks of dividend-paying companies and other securities. The strategy seeks firms with wide or narrow moats that we believe are in a stronger competitive position than their peers and that are trading at a reasonable price.

David served in several senior research and product development roles and was part of the editorial team that created and launched Morningstar.com. He was the co-inventor of Morningstar's first investment advice software. David joined Morningstar in 1994. He holds a bachelor's degree in biology from Skidmore College and a master's degree in biology from the University of Illinois at Springfield.

Our Portfolio Manager

George Metrou is an equity portfolio manager for Mornigstar Investment Management LLC. Metrou joined the team as a portfolio manager in August 2018. Before joining Morningstar Investment Management, he was an equity portfolio manager with Perritt Capital, and as a portfolio manager with Perritt Capital Management. Prior to that he served as Director of Research and as an equity analyst at Perritt Capital, and as a portfolio manager with Windgate Wealth Management. He holds a Bachelor's degree in finance form DePaul University, and he also holds the Chartered Financial Analyst® designation.

Investment Strategy


This strategy takes a concentrated, best-ideas approach when investing in select common stocks of dividend-paying companies and other securities such as American Depositary Receipts, master limited partnerships, and real estate investment trusts. It seeks firms with wide or narrow moats that we believe are in a stronger competitive position than their peers and that are trading at a reasonable price.