Stryker: Among The Best In Healthcare Equipment

Summary

• For established businesses, dividends and earnings per share growth are the primary drivers of total returns on share investments.
• P/E ratios, or more specifically, changes in P/E ratios, are merely ups and downs in sentiment, along the road to the end of the investment journey.
• Likely future EPS growth, and the degree of certainty of that growth, are important factors to consider in share investment decisions.

Understanding The Dividend Growth Income+ Club Approach

Total Return, Dividends, Share Price

Undertaking exercises to determine the current value of a stock is a waste of time, when the market continually provides the only current value that matters when it comes to buy a stock. The only way an investor can achieve a positive return on an investment in shares is through receipt of dividends and/or an increase in the share price above the buy price - the only way. It follows what really matters in share value assessment is the expected price at which a buyer will be able to exit shares, and expected cash flow from dividends.

Stryker Investment Review: Short-term Outlook To End Of 2022

I recently conducted a review of the four pharma companies in the DGI+ Club database of 127 tickers, including Stryker (NYSE:SYK). The stocks in the database are all dividend payers and include the dividend aristocrats. These are all quality stocks and reviews are concentrated on identifying those stocks likely to provide superior returns due to share mispricing as a result of current distortion to market metrics.

At current share price levels, Stryker, with potential for up to mid-teens returns, appears to offer good value. Stryker attracts a relatively high P/E multiple, and I see multiple contraction as the major downside risk for Stryker for investment through the end of 2022. Taking into account this downside risk, Stryker does not offer sufficiently high returns compared to our top healthcare equipment pick, in a market where we believe there is considerable mispricing of stocks at this time, due to COVID-19 disruption of businesses. Summarized in Tables 1.1 and 1.2 below is relevant data on historical and projected performance for Stryker.

Table 1.1 Historical and projected performance

Table 1.1 summarizes historical data from 2016 to

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. I do not recommend that anyone act upon any investment information without first consulting an investment advisor and/or a tax advisor as to the suitability of such investments for their specific situation. Neither information nor any opinion expressed in this article constitutes a solicitation, an offer, or a recommendation to buy, sell, or dispose of any investment, or to provide any investment advice or service. An opinion in this article can change at any time without notice.