NYSE:SYK

Stock Analysis Report

Executive Summary

Stryker Corporation operates as a medical technology company.

Rewards

Trading at 3.1% below its fair value

Earnings are forecast to grow 14.58% per year

Pays a reliable dividend of 1.04%

Risk Analysis

Debt is not well covered by operating cash flow

Large one-off items impacting financial results

Profit margins (14%) are lower than last year (26.1%)

Significant insider selling over the past 3 months



Snowflake Analysis

Average dividend payer with moderate growth potential.


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

2.7%

SYK

0.5%

US Medical Equipment

0.06%

US Market


1 Year Return

18.3%

SYK

20.6%

US Medical Equipment

19.4%

US Market

Return vs Industry: SYK underperformed the US Medical Equipment industry which returned 20.6% over the past year.

Return vs Market: SYK underperformed the US Market which returned 19.4% over the past year.


Shareholder returns

SYKIndustryMarket
7 Day2.7%0.5%0.06%
30 Day4.6%0.1%1.1%
90 Day10.3%7.5%8.9%
1 Year19.5%18.3%21.6%20.6%21.9%19.4%
3 Year80.5%74.4%81.5%76.4%48.9%39.3%
5 Year150.0%134.7%114.9%92.3%71.9%53.1%

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?

3.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SYK ($221.93) is trading below our estimate of fair value ($228.92)

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 (39.8x) compared to the Medical Equipment industry average (46.8x).

PE vs Market: SYK is poor value based on its PE Ratio (39.8x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: SYK is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: SYK is overvalued based on its PB Ratio (6.5x) 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 27 analysts?

14.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SYK's forecast earnings growth (14.6% per year) is above the savings rate (1.7%).

Earnings vs Market: SYK's earnings (14.6% per year) are forecast to grow faster than the US market (14.2% per year).

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

Revenue vs Market: SYK's revenue (6.1% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: SYK's revenue (6.1% 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 high in 3 years time (21.1%)


Next Steps

Past Performance

How has Stryker performed over the past 5 years?

24.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SYK has a large one-off loss of $684.0M impacting its December 31 2019 financial results.

Growing Profit Margin: SYK's current net profit margins (14%) are lower than last year (26.1%).


Past Earnings Growth Analysis

Earnings Trend: SYK's earnings have grown significantly by 24.7% per year over the past 5 years.

Accelerating Growth: SYK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SYK had negative earnings growth (-41.4%) over the past year, making it difficult to compare to the Medical Equipment industry average (7.1%).


Return on Equity

High ROE: SYK's Return on Equity (16.3%) is considered low.


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 ($11.4B) exceed its short term liabilities ($4.4B).

Long Term Liabilities: SYK's short term assets ($11.4B) do not cover its long term liabilities ($13.0B).


Debt to Equity History and Analysis

Debt Level: SYK's debt to equity ratio (86.6%) is considered high.

Reducing Debt: SYK's debt to equity ratio has increased from 46.2% to 86.6% over the past 5 years.

Debt Coverage: SYK's debt is not well covered by operating cash flow (19.8%).

Interest Coverage: SYK's interest payments on its debt are well covered by EBIT (25.7x 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?

1.04%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Stryker before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.0%marketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: SYK's dividend (1.04%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: SYK's dividend (1.04%) is low compared to the top 25% of dividend payers in the US market (3.7%).


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 reasonably low payout ratio (38.3%), 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 (25.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

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 ($USD13.91M) is about average for companies of similar size in the US market ($USD10.78M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Kevin Lobo
Chairman & CEO7.3yrsUS$13.91m0.0083% $6.9m
Timothy Scannell
President & COO1.5yrsUS$6.63m0.043% $35.6m
Glenn Boehnlein
VP & CFO3.8yrsUS$3.79m0.0051% $4.3m
Viju Menon
Group President of Global Quality & Operations1.8yrsUS$4.39m0.00059% $489.6k
Michael Hutchinson
Advisor to Chief Executive Officer0.8yrsUS$2.34m0.0019% $1.6m
William Berry
Principal Accounting Officer6yrsno data0.00028% $232.4k
Robert Cohen
CTO and VP of Global R&D - Joint Replacement0yrsno datano data
Katherine Owen
Vice President of Strategy & Investor Relations3yrsno data0.0017% $1.4m
Bronwen Taylor
Vice President of Compliance & Risk Management6.5yrsno datano data
Robert Fletcher
VP & Chief Legal Officer0.8yrsno datano data

3.0yrs

Average Tenure

52yo

Average Age

Experienced Management: SYK's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kevin Lobo
Chairman & CEO7.3yrsUS$13.91m0.0083% $6.9m
John Brown
Chairman Emeritus0yrsUS$286.99k5.35% $4.4b
Ronda Stryker
Independent Director36.1yrsUS$290.12k6.27% $5.2b
Mary Brainerd
Independent Director2.5yrsUS$290.12k0.00044% $365.1k
Frederic Doliveux
Independent Director9.7yrsUS$305.12k0.0056% $4.7m
Louise Francesconi
Independent Director13.6yrsUS$305.12k0.0044% $3.7m
Srikant T. Datar
Independent Director10.6yrsUS$290.12k0.0056% $4.6m
Allan Golston
Lead Independent Director3.4yrsUS$325.12k0.0024% $2.0m
Rajeev Suri
Independent Director1.8yrsUS$251.58k0.00028% $232.4k
Andrew Silvernail
Independent Director6.3yrsUS$310.12k0.00051% $423.2k

6.3yrs

Average Tenure

63.5yo

Average Age

Experienced Board: SYK's board of directors are considered experienced (6.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$82.983b
  • Shares outstanding: 374.58m
  • 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
S1YK34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

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 that are used in various medical specialties. The Neurotechnology and Spine segment provides neurotechnology products, which 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. This segment also provides spinal implant products comprising cervical, thoracolumbar, and interbody systems that are used 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 75 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 Analysis2020/02/19 00:38
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.