Boston Scientific Corporation (BSX), Medtronic, Inc. (MDT): Is Now the Time to Buy Medical Device Makers?

Medtronic, Inc. (NYSE:MDT) is similarly set to benefit from an aging population, as well as the added effects of the “western diet” and the obesity challenges that leave so many Americans facing diabetes. With a 2% dividend that it’s increased every year (except one) since the mid-1990’s, and consistent earnings and growth, This is where I would put my money if I were buying one of the four. However, unlike MAKO Surgical Corp. (NASDAQ:MAKO), it faces limited seriously disruptive competition, and is incredibly established in the diabetes field.

St. Jude Medical, Inc. (NYSE:STJ) and Boston Scientific Corporation (NYSE:BSX) both need to show me consistent earnings over several quarters before I would even consider investing in them. As established companies, it’s time for the rubber to meet the road. I’m not convinced that St. Jude’s recent spate of acquisitions will pay off, and if you are counting on this, I’d recommend you stay on the sidelines, or open a starter position and watch earnings closely for the next year to see how things pan out.

Foolish bottom line

Medtronic, Inc. (NYSE:MDT) and Stryker Corporation (NYSE:SYK) are established, profitable businesses. Neither is exactly a steal at today’s prices, but both have delivered for years. With that said, I’d definitely watch out for competitive disruption for Stryker from MAKO Surgical Corp. (NASDAQ:MAKO) and be prepared to re-evaluate if it receives approval for total knee replacements.

While there is the potential for MAKO Surgical Corp. (NASDAQ:MAKO) to become the next Intuitive Surgical, Inc. (NASDAQ:ISRG), there is also heavy risk that the company will have to make additional stock offerings just to keep the doors open. I own a small position, but I’m not adding until the company becomes cash-flow positive. If you have a timeline to retirement measured in decades, taking a very small position and watching closely could pay off in spades. But don’t invest money you aren’t prepared to lose because there is significant risk.

Jason Hall owns shares of MAKO Surgical and Medtronic. The Motley Fool recommends MAKO Surgical . The Motley Fool owns shares of Medtronic.

The article Is Now the Time to Buy Medical Device Makers? originally appeared on Fool.com.

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