Better Value & Growth: BSX Leads Stryker Stock

SYK: Stryker logo
SYK
Stryker

BSX is Stryker’s peer in Health Care Equipment industry that has:

1) Lower valuation (P/OpInc) compared to Stryker stock
2) But higher revenue and operating income growth

This disconnect between valuation and performance could mean that you are better off buying BSX stock vs. SYK stock

Individual stocks can be volatile and shake you out, but strategic allocation and diversification helps you stay invested. Our Boston-based, wealth management partner’s asset allocation approach is designed exactly for that.

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Key Metrics Compared

Metric SYK BSX
P/OpInc* 24.7x 23.5x
LTM OpInc Growth 8.4% 32.4%
3Y Avg OpInc Growth 17.8% 25.1%
LTM Revenue Growth 11.2% 19.9%
3Y Avg Revenue Growth 10.8% 16.6%

OpInc = Operating Income, P/OpInc = Price To Operating Income Ratio

But do these numbers tell the full story? Read Buy or Sell SYK Stock to see if Stryker still has an edge that holds up under the hood. As a quick background, Stryker (SYK) provides surgical equipment, navigation systems, patient care products, and implants for hip, knee, trauma, and extremities surgeries through MedSurg and Orthopaedics segments.

This is just one approach to evaluate investments. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure

Is The Mismatch In Stock Price Temporary

One way to check if Stryker stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Stryker in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Stryker would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon

Key Metrics Compared 1 Yr Prior

Metric SYK BSX
P/OpInc* 29.5x 40.2x
LTM OpInc Growth 8.2% 31.6%
3Y Avg OpInc Growth 19.0% 23.4%
LTM Revenue Growth 11.0% 21.6%
3Y Avg Revenue Growth 10.8% 15.6%

OpInc = Operating Income

Additional Metrics To Consider

Metric SYK BSX
P/S 5.0x 4.6x
Market Cap (Current) $ 124.7 Bil $ 93.3 Bil
LTM Revenue $ 25.12 Bil $ 20.07 Bil
LTM Opinc $ 5.06 Bil $ 3.97 Bil
LTM Op Margin 20.1% 19.8%

OpInc = Operating Income

Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the its benchmark – a combination of S&P 500, Russell, and S&P midcap index.