Saturday, January 28, 2012

"This week we go to Dublin, Ireland to find a healthcare company with great earnings and fundamentals, Covidien PLC"

Dow Jones Industrial Average  12,720 (Up) Week ending 01-20-2012

For some reason I was looking at the Medical Equipment suppliers, I guess because I was looking for businesses that will have growth no matter what the economy is doing. That brought me to the spin off from the old Tyco Healthcare
which is the Dublin , Ireland based Covidien PLC (Symbol COV, $51.69),  the price was $48.04 when I started writing this article last weekend. 2012 annual earnings looking like $4.26 per share and 2013 earnings of $4.61 per share 

Covidien PLC's (COV) fiscal first-quarter earnings rose 16% as the medical-products maker posted improved sales in its key medical devices business and strengthened margins. Dow Jones reports that "The maker of operating-room gear, generic drugs and other items has in recent quarters boasted strong sales in its medical devices segment, which it has reshaped in recent years. The business, which accounts for roughly two-thirds of the company's top line, reported sales grew 5.7% in the latest quarter to $1.98 billion. "

Ireland, which charges some of the lowest tax rates on businesses , has been a shining model for the rest of the world on how to do it right. COV now has 20 analyst that have strong buy recommendations on the stock. The Total three year return on the stock is 41.2%. The stock also pays a 1.74% dividend rate currently giving you a nice annual return on investment combined with its growth. The company also operates at a  has a nice Net Profit Margin of 16.5%.   The Fidelity Select Medical Fund has 12.84% of their fund invested in this stock. Their YTD return so far is 8.73%

COV, I believe, based on fundamentals can make up a solid part of your diversified portfolio. The stock trades on the New York Stock Exchange and Ireland may take a small piece of the dividend paid. My daughter has visited Ireland and she says they are very welcoming to visitors.    
             So Freewilly says "Go Irish!"         Freewilly    

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