Will Intuitive Surgical Ever Pay A Dividend?

Advances in technology have been enormous in recent years, to say the least. That is certainly true in medicine as well, with innovation in medications as well as equipment driving better outcomes for patients, and profits for the companies that innovate more quickly than competitors.

One such company is Intuitive Surgical (ISRG), a medical device maker that has seen its stock soar nearly 900% in the past ten years. It is a large-cap stock with a market capitalization now at a very impressive $88 billion after another strong run in 2020.

Intuitive Surgical’s profit base is quite significant and growing. But for income-focused investors, Intuitive Surgical may not be the right choice.

After all, the company has never paid a dividend. However, as it matures in its growth cycle and generates excess cash, the potential for a dividend rises. In this article, we’ll examine Intuitive Surgical’s business, growth potential, and whether it might ever pay a dividend.

Business Overview

Intuitive Surgical was founded in 1995, and in just 25 years, has gone from a startup with essentially no revenue to a giant in the field of medical devices. The company designs manufactures, and markets its da Vinci surgical systems and related accessories and instruments, primarily in the U.S.

The da Vinci machine is an all-in-one solution for performing a variety of surgical procedures as the surgeon is aided by technology, rather than relying upon a human to perform the surgery alone. Da Vinci’s applications are numerous, including gynecology, urology, cardiothoracic, head and neck procedures, and more. The uptake in da Vinci has been extraordinary over the years, and this single product has turned Intuitive Surgical into the global leader in medical devices that it is today.

The da Vinci machines performed more than 7.2 million procedures worldwide last year, and without the disruption of COVID-19, would have performed significantly more this year. However, the company’s installed base of nearly six thousand machines, as well as its ever-growing customer list mean that the backlog for postponed surgeries is robust.

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Disclosure: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.

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