You'd think shareholders of St. Jude Medical Inc. stock would be happy. For the first time in 17 years, the company this year has paid quarterly dividends.
But at the company's annual meeting Thursday, one person asked the elephant-in-the-room question: Does this mean St. Jude is officially a "mature" company -- in other words, one with less potential to innovate?
In a 94-minute meeting at the Minnesota History Center, CEO Daniel Starks detailed 18 of the medical technology company's top projects, including new ways to treat heart disease, depression, migraine headaches, Parkinson's disease and more.
"This is a message to investors that we're in good shape," Starks told the crowd of about 60 people. "We have not capitulated as a high-growth company."
Little Canada-based St. Jude said it would pay a second-quarter dividend of 21 cents per common share, payable July 20 to shareholders of record as of June 30. The company already paid out a first-quarter dividend for the same amount.
Starks said St. Jude will set aside $274 million annually for dividend payments. "You don't start something like this unless you can sustain it," Starks said.
As far as the dreaded "maturity" label goes, the University of Minnesota's Stephen Parente says "in med-tech, you'd expect a company to plow any profit back into [research and development]."
But in an industry with higher profit margins, as is the case with many sophisticated medical devices, "it may be a sign of strength," said Parente, a finance professor at the U's Carlson School of Management.
