Intuitive Surgical, Inc. (ISRG): Terror and Opportunity

Stryker Corporation (NYSE:SYK) is a strong device maker that is built on the backs of acquisitions. Stryker recently finished acquiring a large Chinese company that focuses on orthopedics. The push into China is a great one. A lot of the growth from medical care will happen in the developing world. A place like China has fantastic growth, and there is space for a company like Stryker Corporation (NYSE:SYK) to increase product offerings to the growing and aging Chinese population.

Stryker Corporation (NYSE:SYK)’s strategy of acquiring companies allows it to grow quickly, but it can be in uneven lurches. Acquisitions can also go wrong if the two companies are not good fits or if the target was easy to acquire because it is in a decline. Stryker probably cannot be considered traditionally safe, but it is safer than Intuitive Surgical, Inc. (NASDAQ:ISRG).

Medtronic, Inc. (NYSE:MDT) does not have as many interesting developments of the type that I like. The company is consistently growing, but it is organic. Quarterly revenue growth has been under 3%, while earnings growth has been more inconsistent, though near 10% seems to be the generous norm. Growth in general lags at Medtronic, Inc. (NYSE:MDT) and I see that sentiment along with a positive statement going hand-in-hand. Basically, Medtronic, Inc. (NYSE:MDT) will show solid, not fantastic, growth, and it offers a respectable dividend with a yield over 2%. It has solid net margins at 25%, which is pretty good considering Stryker’s is at 11%.

Conclusion

Sorry for the quick survey of safe alternatives, but there has been a tide of negative information regarding Intuitive Surgical, Inc. (NASDAQ:ISRG). I spent hours sorting through it all and digging down to the truth behind the so-called reporting. Investors seem to be doing a good job of understanding that it is very early and a lot of information is not available, but there are some bombastic news pieces out there. Medtronic probably offers the most robust play here, which means it is the one least likely to suffer a tragic misstep. However, with that reduced risk, you are likely to see slightly lower gains.

The article Intuitive Surgical: Terror and Opportunity originally appeared on Fool.com and is written by Nihar Patel.

Nihar Patel has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical. The Motley Fool owns shares of Intuitive Surgical and Medtronic. Nihar is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.