Physicians today, and particularly surgeons, are using equipment and techniques that were undreamed of even a generation ago. A company that has been on the cutting edge of the medical technology revolution, with the prospect of more innovation ahead, is Stryker Corporation (NYSE: SYK).

The Kalamazoo, Michigan-based firm has a diverse array of products that includes implants used in joint replacement and trauma surgeries; surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling and emergency medical equipment; neurosurgical, neurovascular and spinal devices; as well as other medical device products.

The company should be attractive to both growth- and income-oriented investors. Last month Stryker’s board of directors increased its dividend by 15 percent, compared to the prior year, by declaring a quarterly dividend of 30 cents per share.

In the fourth quarter, Stryker posted net sales growth of 5.6 percent to $2.5 billion. Earnings per share increased 42 percent to $1.01 per share. For the full year, net sales growth was up 4.2 percent to $9 billion, and cash flow from operations increased 13.8 percent to $1.9 billion.

The company has a market cap of $29.1 billion. Its debt levels seem quite reasonable considering its steady revenue growth, and its price-earnings ratio of 31 is justified by its history of innovation and expansion.

In the United States, most of Stryker’s products are marketed directly to doctors, hospitals and other healthcare facilities. Internationally, Stryker products are sold in over 100 countries through company-owned sales subsidiaries and branches as well as third-party dealers and distributors.

“We’re pleased with the organic sales growth and operational earnings we achieved in 2013. With our broad-based product portfolio and commitment to innovation and globalization, we’re well positioned to build on this momentum in 2014,” said company president Kevin Lobo.

Stryker’s product lines are in three major business segments: Reconstructive, Medical & Surgical, and Neurotechnology & Spine. Reconstructive products consist primarily of implants used in hip and knee joint replacements and trauma and extremities surgeries.

MedSurg products include surgical equipment and surgical navigation systems (instruments); endoscopic and communications systems (endoscopy); patient handling and emergency medical equipment; and reprocessed and remanufactured medical devices as well as other medical device products used in a variety of medical specialties.

Stryker Neurotechnology and Spine products include a portfolio of products including both neurosurgical and neurovascular devices. Their neurotechnology offering includes products used for minimally invasive endovascular techniques, as well as a line of products for traditional brain and open skull base surgical procedures, orthobiologic and biosurgery products including synthetic bone grafts and vertebral augmentation products, as well as minimally invasive products for the treatment of strokes.

The firm also develops, manufactures and markets spinal implant products including cervical, thoracolumbar and interbody systems used in spinal injury and deformity therapies.

Stryker recently revealed that it is in the process of acquiring Patient Safety Technologies for an aggregate purchase price of $120 million. The company’s proprietary Safety-Sponge System and SurgiCount 360 compliance software help prevent what the medical community delicately calls Retained Foreign Objects (RFOs) – in other words, the surgeon accidentally left something inside the patient.

The safety system includes bar-coded surgical sponges and towels, an integrated barcode scanner, and compliance tracking software. In 2013 it produced revenue of more than $16 million, which will be a healthy addition to Stryker’s sales growth.

Scary as it may sound, RFOs are the most common operating room mishap in the United States. Sponges are the most common retained object, with approximately 2,300 incidents reported annually at an average cost per incident of over $400,000. The SurgiCount Safety Sponge System offers a way to eliminate unnecessary costs from the healthcare system while improving quality of care. 

Since its launch in 2006, SurgiCount has established a strong customer base of over 300 hospitals including several of the leading medical institutions in the U.S. The Safety Sponge System will become part of Stryker’s Instruments division’s offerings and will augment Stryker Instruments’ broad portfolio of products that are designed to improve perioperative care.

“We are committed to providing solutions that result in a higher quality of care and level of safety for both patients and healthcare professionals,” said Timothy Scannell, head of Stryker’s MedSurg and Neurotechnology division. “This acquisition aligns with Stryker’s focus on offering products and services that have demonstrated cost effectiveness and clinical outcomes.”

Stryker has also acquired the privately held Concentric Medical, Inc. (Concentric) in an all cash transaction for $135 million. Concentric’s products include devices for the removal of thrombus in patients experiencing acute ischemic stroke along with a broad range of AIS access products.

And in November 2012, Stryker acquired the Tel Aviv, Israel-based Surpass Medical Ltd., a company developing a flow diversion stent technology to treat brain aneurysms using a mesh design and delivery system, for $135 million.

Finally, in December 2013, Stryker acquired MAKO Surgical Corporation (MAKO). MAKO is a company in South Florida that manufactures and markets surgical robotic arm assistance platforms, most notably the RIO (Robotic Arm Interactive Orthopedic System) as well as orthopedic implants used by orthopedic surgeons for use in partial knee and total hip arthroplasty.

With all these acquisitions plus the strong revenue growth generated by its existing product line, Stryker should remain at the top of its game for some time to come.

Tom Scarlett is an investment analyst at Personal Finance and its parent web site Investing Daily.