Dividend Stocks
Meet the 3%-Yielding Dividend Stock That Could Surge in 2026
The field of robotic surgery is one of the most exciting areas in modern healthcare. While many investors are already familiar with Intuitive Surgical (NASDAQ: ISRG) and its da Vinci robotic system, there’s another big player quietly positioning itself for strong growth — and unlike Intuitive, it pays a dividend.
That company is Medtronic (NYSE: MDT), a diversified medical-device giant with a long history of shareholder returns. With a 3% dividend yield, upcoming structural changes, and a growing foothold in robotic surgery, Medtronic could be a compelling opportunity for long-term investors heading into 2026.
Robotic Surgery: A Growing Mega-Trend
Robotic-assisted surgery offers patients and hospitals clear benefits. From less invasive procedures and faster recovery times to enhanced surgical precision, the advantages are driving rapid adoption worldwide. In fact, the number of robotic-assisted surgeries continues to rise annually, making this a key growth industry for the next decade.
Intuitive Surgical’s da Vinci robot currently dominates the space, with more than 10,000 systems installed globally and double-digit growth in procedure volume. However, while Intuitive offers impressive growth potential, there’s one drawback for income-focused investors — it does not pay a dividend.
Medtronic’s Big Bet: The Hugo Robotic System
Medtronic is one of the largest medical technology companies in the world, with strong businesses in cardiovascular devices, diabetes care, surgical tools, and neuroscience. Its entrance into robotic surgery comes through the Hugo system, a next-generation surgical robot designed to compete with da Vinci.
Although Hugo is still in the rollout phase, it represents a major growth driver for Medtronic. Much like Intuitive’s business model, the initial sale of a robot is only the beginning. Replacement parts, upgrades, and services make up the bulk of long-term revenue — creating a recurring income stream that could fuel Medtronic’s earnings for years to come.
With global demand for robotic surgery rising, there’s room for multiple players, and Medtronic’s existing hospital relationships give it a powerful entry point.
Strategic Tailwinds: Spinoff and Profitability Boost
Beyond robotics, Medtronic is undergoing a major strategic shift that could unlock additional shareholder value. In 2026, the company plans to spin off its diabetes division into a separate entity. While the diabetes business has shown growth, its margins are lower compared to Medtronic’s other divisions.
By separating the unit, Medtronic expects overall profitability to improve, allowing its higher-margin businesses — such as cardiovascular and surgical technologies — to stand out more clearly. Analysts expect this move to be earnings accretive, meaning it could increase the company’s bottom line post-spinoff.
At the same time, Medtronic has a pipeline of new products gaining regulatory approval. These innovations, combined with the robotics push and the diabetes spinoff, set the stage for stronger earnings momentum from 2026 onwards.
Dividend Strength: A 48-Year Growth Streak
One of Medtronic’s biggest advantages for investors is its dividend track record. The company has raised its dividend for 48 consecutive years, making it a member of the elite Dividend Aristocrats club.
Today, Medtronic offers a dividend yield of around 3%, which is near the high end of its historical range. Importantly, the payout is well-supported by strong cash flows, giving investors confidence that future dividend growth is sustainable.
This makes Medtronic not just a growth story, but also a steady income play — a rare combination in the fast-growing world of robotic surgery.
Valuation: An Attractive Entry Point
From a valuation perspective, Medtronic looks appealing compared to its history. Its price-to-sales (P/S) and price-to-earnings (P/E) ratios currently sit below their five-year averages, suggesting the stock is trading at a discount.
Combine this with the upcoming spinoff, rising adoption of its Hugo system, and a strong innovation pipeline, and Medtronic looks like it could be undervalued heading into 2026.
The Bottom Line for Investors
While Intuitive Surgical remains the leader in robotic surgery, dividend investors don’t have to miss out on this megatrend. Medtronic (NYSE: MDT) offers exposure to robotic-assisted surgery, a robust product pipeline, a promising spinoff, and a dividend yield that’s rare in the sector.
For long-term investors seeking a balance of growth and income, Medtronic could be a hidden gem. If its Hugo system gains wider adoption and profitability improves after the diabetes spinoff, the company may have the ingredients for a strong run in 2026 and beyond.
With nearly five decades of dividend growth and a yield above 3%, Medtronic provides both stability and upside potential — making it one of the most attractive dividend-paying stocks to watch in the robotic surgery revolution.
⚠️ Disclaimer
This article is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult with a professional financial advisor before making investment decisions.