Stryker Corporation (SYK)

Stryker makes orthopaedic implants and surgical instruments — its revenue follows the number of procedures.

The main lines are joint replacements, neurosurgical and trauma instruments, hospital beds and equipment. Demand is demographic: an ageing population produces steady growth in knee and hip replacements, largely independent of the economic cycle.

The key competitive advantage is a robotic platform for implant placement: a surgeon trained on it keeps using that company's implants, and a hospital that buys the system is locked in for years. That turns an equipment sale into a channel for consumables.

The constraint is hospital throughput and staffing: when nurses are short, procedures are postponed, and that shows in the accounts. The company also grows by acquiring specialist manufacturers. Stryker pays a dividend with a long record of increases.