NYSE:SYK

Stock Analysis Report

Executive Summary

Stryker Corporation operates as a medical technology company.

Rewards

Trading at 7.1% below its fair value

Earnings are forecast to grow 10.27% per year

Earnings grew by 177.2% over the past year

Pays a reliable dividend of 1.11%

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results



Snowflake Analysis

Solid track record average dividend payer.


Similar Companies

Share Price & News

How has Stryker's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SYK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.0%

SYK

2.3%

US Medical Equipment

0.6%

US Market


1 Year Return

30.9%

SYK

30.3%

US Medical Equipment

24.6%

US Market

Return vs Industry: SYK exceeded the US Medical Equipment industry which returned 27.5% over the past year.

Return vs Market: SYK exceeded the US Market which returned 23.2% over the past year.


Shareholder returns

SYKIndustryMarket
7 Day5.0%2.3%0.6%
30 Day2.1%4.3%3.0%
90 Day2.7%13.8%10.6%
1 Year32.3%30.9%31.3%30.3%27.3%24.6%
3 Year85.5%79.2%96.4%90.7%50.5%40.8%
5 Year149.3%134.0%133.4%108.5%78.9%59.1%

Price Volatility Vs. Market

How volatile is Stryker's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Stryker undervalued compared to its fair value and its price relative to the market?

3.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SYK ($207.96) is trading below our estimate of fair value ($223.8)

Significantly Below Fair Value: SYK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SYK is good value based on its PE Ratio (22.7x) compared to the Medical Equipment industry average (46.3x).

PE vs Market: SYK is poor value based on its PE Ratio (22.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: SYK is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: SYK is overvalued based on its PB Ratio (6.3x) compared to the US Medical Equipment industry average (4.1x).


Next Steps

Future Growth

How is Stryker forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SYK's forecast earnings growth (10.3% per year) is above the savings rate (1.7%).

Earnings vs Market: SYK's earnings (10.3% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: SYK's earnings are forecast to grow, but not significantly.

Revenue vs Market: SYK's revenue (6.2% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: SYK's revenue (6.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SYK's Return on Equity is forecast to be low in 3 years time (19.9%).


Next Steps

Past Performance

How has Stryker performed over the past 5 years?

28.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SYK has a large one-off loss of $929.0M impacting its September 30 2019 financial results.

Growing Profit Margin: SYK's current net profit margins (23.5%) are higher than last year (9.3%).


Past Earnings Growth Analysis

Earnings Trend: SYK's earnings have grown significantly by 28% per year over the past 5 years.

Accelerating Growth: SYK's earnings growth over the past year (177.2%) exceeds its 5-year average (28% per year).

Earnings vs Industry: SYK earnings growth over the past year (177.2%) exceeded the Medical Equipment industry 31%.


Return on Equity

High ROE: SYK's Return on Equity (27.8%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Stryker's financial position?


Financial Position Analysis

Short Term Liabilities: SYK's short term assets ($8.6B) exceed its short term liabilities ($3.9B).

Long Term Liabilities: SYK's short term assets ($8.6B) do not cover its long term liabilities ($10.4B).


Debt to Equity History and Analysis

Debt Level: SYK's debt to equity ratio (68.3%) is considered high.

Reducing Debt: SYK's debt to equity ratio has increased from 45.9% to 68.3% over the past 5 years.

Debt Coverage: SYK's debt is well covered by operating cash flow (29.7%).

Interest Coverage: SYK's interest payments on its debt are well covered by EBIT (29.5x coverage).


Balance Sheet

Inventory Level: SYK has a high level of physical assets or inventory.

Debt Coverage by Assets: SYK's debt is covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is Stryker's current dividend yield, its reliability and sustainability?

1.06%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.1%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: SYK's dividend (1.11%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: SYK's dividend (1.11%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: SYK's dividends per share have been stable in the past 10 years.

Growing Dividend: SYK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.7%), SYK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SYK's dividends in 3 years are forecast to be well covered by earnings (24.9% payout ratio).


Next Steps

Management

What is the CEO of Stryker's salary, the management and board of directors tenure and is there insider trading?

2.9yrs

Average management tenure


CEO

Kevin Lobo (54yo)

7.3yrs

Tenure

US$13,911,065

Compensation

Mr. Kevin A. Lobo, ACFE has been the Chief Executive Officer of Stryker Corporation since October 1, 2012. Mr. Lobo served as the President of Stryker from October 1, 2012 to August 1, 2018. He served as t ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD13.91M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Kevin's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.9yrs

Average Tenure

53yo

Average Age

Experienced Management: SYK's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

6.2yrs

Average Tenure

63.5yo

Average Age

Experienced Board: SYK's board of directors are considered experienced (6.2 years average tenure).


Insider Trading

Insider Buying: SYK insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$8,67101 Nov 19
Frederic Doliveux
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares40
Max PriceUS$216.77
SellUS$111,60003 Sep 19
William Berry
EntityIndividual
Role
Chief Accounting Officer
Principal Accounting Officer
Shares500
Max PriceUS$223.20
SellUS$75,25016 Aug 19
Srikant T. Datar
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares350
Max PriceUS$215.00
SellUS$8,424,48902 Aug 19
Ronda Stryker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares39,818
Max PriceUS$211.57
BuyUS$8,72601 Aug 19
Frederic Doliveux
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares41
Max PriceUS$212.84
SellUS$19,304,71101 Aug 19
Ronda Stryker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares90,182
Max PriceUS$214.06
SellUS$380,85507 May 19
Bijoy S. Sagar
EntityIndividual
Shares2,000
Max PriceUS$190.43
BuyUS$8,11703 May 19
Frederic Doliveux
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares43
Max PriceUS$188.77
SellUS$501,64829 Apr 19
Louise Francesconi
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,679
Max PriceUS$187.25
SellUS$31,81904 Feb 19
M. Fink
EntityIndividual
Shares180
Max PriceUS$176.77
BuyUS$8,15404 Feb 19
Frederic Doliveux
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares46
Max PriceUS$177.26

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Tim Scannell (54yo)

    President & COO

    • Tenure: 1.4yrs
    • Compensation: US$6.63m
  • Bronwen Taylor

    Vice President of Compliance & Risk Management

    • Tenure: 6.4yrs
  • Katherine Owen (48yo)

    Vice President of Strategy & Investor Relations

    • Tenure: 2.9yrs
  • Robert Cohen

    CTO and VP of Global R&D - Joint Replacement

    • Kevin Lobo (54yo)

      Chairman & CEO

      • Tenure: 7.3yrs
      • Compensation: US$13.91m
    • William Berry (53yo)

      Principal Accounting Officer

      • Tenure: 5.9yrs
    • Mike Hutchinson (48yo)

      Advisor to Chief Executive Officer

      • Tenure: 0.8yrs
      • Compensation: US$2.34m
    • Glenn Boehnlein (57yo)

      VP & CFO

      • Tenure: 3.8yrs
      • Compensation: US$3.79m
    • Viju Menon (51yo)

      Group President of Global Quality & Operations

      • Tenure: 1.8yrs
      • Compensation: US$4.39m
    • Robert Fletcher

      VP & Chief Legal Officer

      • Tenure: 0.8yrs

    Board Members

    • John Brown (84yo)

      Chairman Emeritus

      • Compensation: US$286.99k
    • Ronda Stryker (64yo)

      Independent Director

      • Tenure: 36yrs
      • Compensation: US$290.12k
    • Mary Brainerd (65yo)

      Independent Director

      • Tenure: 2.4yrs
      • Compensation: US$290.12k
    • Frederic Doliveux (63yo)

      Independent Director

      • Tenure: 9.6yrs
      • Compensation: US$305.12k
    • Louise Francesconi (66yo)

      Independent Director

      • Tenure: 13.5yrs
      • Compensation: US$305.12k
    • Srikant T. Datar (66yo)

      Independent Director

      • Tenure: 10.5yrs
      • Compensation: US$290.12k
    • Allan Golston (52yo)

      Lead Independent Director

      • Tenure: 3.3yrs
      • Compensation: US$325.12k
    • Rajeev Suri (52yo)

      Independent Director

      • Tenure: 1.7yrs
      • Compensation: US$251.58k
    • Andy Silvernail (48yo)

      Independent Director

      • Tenure: 6.2yrs
      • Compensation: US$310.12k
    • Kevin Lobo (54yo)

      Chairman & CEO

      • Tenure: 7.3yrs
      • Compensation: US$13.91m

    Company Information

    Stryker Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Stryker Corporation
    • Ticker: SYK
    • Exchange: NYSE
    • Founded: 1941
    • Industry: Health Care Equipment
    • Sector: Healthcare
    • Market Cap: US$81.271b
    • Shares outstanding: 374.40m
    • Website: https://www.stryker.com

    Number of Employees


    Location

    • Stryker Corporation
    • 2825 Airview Boulevard
    • Kalamazoo
    • Michigan
    • 49002
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SYKNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1980
    SYKDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1980
    SYKXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1980
    SYKSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1980
    0R2SLSE (London Stock Exchange)YesCommon StockGBUSDJan 1980
    SYK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1980
    SYKWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1980

    Biography

    Stryker Corporation operates as a medical technology company. The company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. The Orthopaedics segment provides implants for use in hip and knee joint replacements, and trauma and extremities surgeries. The MedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, and other medical devices for use in various medical specialties. The Neurotechnology and Spine segment provides neurotechnology products that include products used for minimally invasive endovascular techniques; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke. It also provides spinal implant products comprising cervical, thoracolumbar, and interbody systems for use in spinal injury, deformity, and degenerative therapies. The company sells its products to doctors, hospitals, and other healthcare facilities through company-owned subsidiaries and branches, as well as third-party dealers and distributors in approximately 80 countries. Stryker Corporation was founded in 1941 and is headquartered in Kalamazoo, Michigan. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/22 23:48
    End of Day Share Price2020/01/22 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.