Medtronic once was considered a pioneer in healthcare technology and had a growth stock to match but ceded its leads to competitors such as Boston Scientific
With its stock at a 10-year low, Medtronic wants to create and buy new products and technology to beef up its cardiac, spinal, diabetes and neuroscience treatments, Barron's said.
It also wants to counter the effects of U.S. healthcare reform and is on the way to cutting costs to a point that it could achieve $1 billion in savings by 2012, Barron's said.
Meanwhile, Medtronic has committed to paying out more than 40 percent of its cash flow in dividends and stock buybacks. The company aims to generate $20 billion of cash in the next five years, Barron's reported.
Medtronic, which reports its fiscal 2009 results on Tuesday, even could increase its dividend, Barron's said.
Medtronic's stock is cheap right now, Barron's said, trading at 11.4 times fiscal 2009 estimates and 10.5 times fiscal 2010 estimates of $3.20 a share.
That puts it below the 13 price-to-earnings multiple for the Standard & Poor's 500 Health Care Equipment and Services index, and a price-to-earnings multiple of 15 for the broader S&P, Barron's said -- its lowest multiple in at least 10 years.
(Reporting by Robert MacMillan; Editing by Steve Orlofsky)