Stryker CorporationSYK

Morningstar Rating

Stock Research and Analysis

by Julie Stralow, CFA

Stryker excels in several orthopedic and medical equipment niches. We expect the firm to continue launching innovative new products to help expand these niches and its own profitability even further in the long run.

Around 60% of Stryker's revenue Read more

Bulls Say

Stryker's balance sheet is filled with cash. Acquisitions to accelerate growth remain a key priority, but the firm could return value to shareholders by other means, as well.

International operations in Stryker's MedSurg segment--operating room and other medical equipment--remain relatively small and provide a key growth opportunity.

Stryker is developing two artificial spinal discs, which could pump growth even further for Stryker's fast-growing spine division within the next several years. Read more

Bears Say

Health-care reform efforts could reduce long-term returns in Stryker's U.S. operations, which accounted for 64% of the firm's business in 2008.

With multiple Food and Drug Administration warning letters outstanding, Stryker needs to improve quality-control measures in its manufacturing operations, and this is adding costs to the firm's infrastructure. If these efforts fail, new product launches could be delayed.

Although Stryker escaped most of the punishment when the Department of Justice targeted knee and hip providers, it might not be so lucky in future dealings with the DOJ, which has turned its attention to a key growth area for Stryker--the spine market. Read more

Strategy

Stryker hopes to arm hospitals and surgeons with the tools needed to successfully treat patients. Its broad product set includes orthopedic implants, operating room equipment, and medical furniture. Read more

Management

Although we think Stryker's stewards employ fair practices, outside shareholders should be aware of how little control they may have on Stryker's strategic direction. Stephen MacMillan heads the firm's executive team, while Stryker's former, long-time Read more

Profile

Stryker develops, manufactures, and markets medical devices and equipment for use primarily in orthopedic procedures. The firm generates most of its revenue from reconstructive Read more

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