Will Intuitive Surgical Ever Pay A Dividend?

The company’s most recent earnings report showed a slowdown compared to prior quarters, but again, this was due to COVID-19-related disruption, and not a fundamental deterioration in the company’s prospects. Worldwide da Vinci procedures rose 7% year-over-year, reflecting what the company called a partial recovery from COVID-19.

It also shipped 195 da Vinci systems, a decline of 29% from the 275 systems it shipped in the same period a year ago. However, the installed base grew 8% year-over-year to 5,865 systems as of the end of the quarter.

Revenue was $1.078 billion, a decline of 4% year-over-year, driven by fewer new system placements in 2020, as well as a slight decline in revenue from the company’s customer relief program, which is a direct result of COVID-19.

Instruments and accessories revenue was up 4% year-over-year to $631 million, which was driven by the growth in procedure volume. Systems revenue was down 21% to $268 million, attributable to fewer new machines being shipped.

Net income came to $334 million, or $2.77 per share on an adjusted basis, down from $409 million and $3.43 per share in the same period a year ago. Intuitive Surgical built its cash position by a further $287 million in Q3, and it now stands at $6.4 billion.

Competitive Advantages

Intuitive Surgical’s competitive advantage is obvious in that it is the only company in the world that makes a machine that is as versatile and well-accepted among medical practitioners as da Vinci. Its unparalleled growth in the past two decades is a testament to its durable advantage.

Source: Investor presentation

The company is still heavily reliant upon the US for its revenue, but as the above picture shows, Intuitive Surgical has been busy expanding globally as well.

With a huge market opportunity for thousands of new da Vinci placements in the developed and developing markets of the world, we see this advantage as durable for the long-term. There simply is not a viable competitor to da Vinci at this point.

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