Stryker Corporation SYK has been gaining investor confidence on continued positive results. Over the past year, the stock has rallied 15.3% compared with the industry’s 6.7% gain. Also, the company has outperformed the S&P 500’s 1.7% rally.
Moreover, the company has an encouraging earnings surprise history, having outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average being 2.2%. Notably, this trend of consecutive beats underlines its operating efficiency. A strong international presence and an acquisition-driven strategy are working in favor of the stock.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive investment pick for now.
What’s Working in Favor?
Stryker is focusing on international growth. A significant turnaround in the company’s European business owing to effective restructuring measures looks promising.
Recently, Stryker’s core Orthopaedic segment put up a solid show in Europe, emerging markets and Canada. Additionally, MedSurg performed strongly in Europe, Australia and emerging markets. Neurotechnology & Spine also saw strong demand in Europe, China and Japan.
Stryker has been following an acquisition-driven strategy to boost growth. Last month, it acquired Arrinex, a California-based medical device company which is expected to boost the company’s Neurotechnology & Spine business. (Read More: Stryker Expands Acquisition Portfolio With Arrinex Buyout)
In recent times, the company took over K2M Group Holdings for approximately $1.4 billion. It is expected to provide Stryker’s Spine unit a highly complementary and innovative product portfolio, which includes minimally invasive offerings. In fact, in the recently-reported fourth quarter of 2018, the acquisition provided a major boost to Stryker’s Neurotechnology & Spine segment.
Stryker also announced the acquisitions of HyperBranch Medical Technology and Invuity Inc recently. The deals are likely to boost the Neurotechnology and Spine unit.
Which Way Are Estimates Treading?
The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $1.83, reflecting a year-over-year increase of 8.9%. The same for revenues stands at $3.51 billion, indicating an 8.4% rise.
For the full year, the Zacks Consensus Estimate for earnings is at $8.12, reflecting a rise of 11.1%. The same for revenues stands at $14.80 billion, indicating an 8.8% rise.
Stryker Corporation Price and Consensus
Stryker Corporation Price and Consensus | Stryker Corporation Quote
Stryker seems to be positioned for growth on strong international presence and encouraging acquisitions. The company's long-term earnings growth rate of 10% also supports our view.
Want More From the Industry?
Other top-ranked stocks from the Medical Product space are Bio-Rad Laboratories, Inc. BIO, Surmodics, Inc. SRDX and Meridian Bioscience Inc. VIVO. While Bio-Rad and Surmodics carry a Zacks Rank #1 (Strong Buy), Meridian carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bio-Rad’s long-term earnings growth rate is projected at 15%.
Surmodics’ long-term earnings growth rate is expected to be 10%.
Meridian’s current-year earnings growth rate is projected at 2.7%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Surmodics, Inc. (SRDX) : Free Stock Analysis Report
Bio-Rad Laboratories, Inc. (BIO) : Free Stock Analysis Report
Meridian Bioscience Inc. (VIVO) : Free Stock Analysis Report
Stryker Corporation (SYK) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research