(SYK) - Stryker Corp - return on equity (ROE) is triple the industry average--22% compared to 7%

Stryker Corporation (SYK) met or beat analysts’ earnings expectations in 15 out of the past 16 quarters. Earnings per share are expected to grow 19% over the next 3-5 years, while the industry is forecasted to grow at a 17% clip. On Dec 6, the Board of Directors doubled its year-end cash dividend to 22 cents per share. The company’s return on equity more than triples that of the industry average—22% compared to 7%. Full Analysis Stryker Corporation engages in the development, manufacture and marketing of orthopedic products and medical specialties worldwide. The company also provides outpatient physical therapy services, including physical, occupational and speech therapy services to patients recovering from orthopedic or neurological illness and injury. Over the past 16 quarters, SYK failed to meet or beat analysts’ earnings expectations on only one occasion. In fact, it missed by only a penny. Over this period of time, the company beat the Street’s estimate 10 times. Earnings per share grew 26.2% over the past five years. On Oct 17, SYK posted third-quarter earnings per share of 46 cents, which were in line with the consensus estimate. Compared to profits of 40 cents per share in the prior-year period, the result marked a 15.0% year-over-year improvement. Revenues jumped 10.3% to $1.29 billion from $1.17 billion in the third quarter of 2005. An 11% increase in the company’s reconstructive products led the way. SYK is expected to release results for the fourth quarter on Jan 25, 2007. President and CEO Stephen P. MacMillan stated, “We are pleased to report another strong quarter with double-digit sales growth and very strong earnings growth led by the resurgence of our U.S. Orthopedics division.” For the first nine months of the year, profits came in at $549.8 million compared to $465.2 million for the first nine months of 2005. Revenues climbed 9.8% to $3.94 billion from $3.59 billion. SYK increased revenues and expanded gross margins for the past nine years. The company grew profits for six years running. Earnings per share are expected to grow 19% over the next 3-5 years, while the industry is forecasted to grow at a 17% clip. On Dec 6, the Board of Directors declared a year-end cash dividend of 22 cents per share. This doubled the 11-cent dividend announced in December 2005. MacMillan stated, “This increased dividend reflects the company's strong cash flow generation capability and allows us to return increased value to shareholders.” SYK is currently yielding 0.40%. The company’s return on equity, a common measure of profitability, more than triples that of the industry average—22% compared to 7%. SYK is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.6% since 1988. Because the Zacks Rank has a market cap bias, Growth & Income investors may find a greater number of large-cap stocks by considering both Zacks #1 Rank (Strong Buy) and Zacks #2 Rank (Buy) stocks in their selection criteria. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home