Q. My shares of Stryker Corp. disappointed me in the past year. Will this year look any better? — B.C., via the Internet

A. Analysts expect the cash-rich medical-device manufacturer to turn in double-digit revenue and profit gains in the coming years, boosted by needs of the baby boomer generation and by growing international prospects.

The firm has enjoyed eight consecutive years of double-digit sales growth. It makes orthopedic implants used for knee and hip reconstruction, as well as operating equipment and tools employed in such procedures. It also manufactures hospital beds, stretchers and other equipment.

Despite the company's long-term potential, the recession may mean significant cuts in hospital-equipment spending, postponed elective orthopedic procedures and difficulty in raising product prices.

Shares of Stryker (SYK) declined 47 percent in 2008 following gains of 36 percent in 2007 and 24 percent in 2006. Stryker boasts a large amount of cash for dividend increases, share repurchases and potential acquisitions.

Its board of directors approved a 20 percent increase in the annual dividend, payable January 30 to shareholders of record on December 31. After a $750 million stock-repurchase programme was completed in October, the board authorised another $250 million in repurchases.

The analyst ratings on Stryker stock consist of nine "strong buys," four "buys" and 10 "holds."

Regulatory and competitive issues are concerns.

Stryker has received Food and Drug Administration warning letters regarding problems at some of its manufacturing plants, and it is working to correct them. In addition, a federal appeals court upheld a permanent injunction that prevented Stryker from selling a screw used to treat shoulder fractures because it infringed on an Acumed LLC patent.

Stryker recently had to disclose payments made to surgeons for consulting work. This was part of a 2007 agreement with the Justice Department after an investigation into allegations that orthopedics firms rewarded surgeons through contracts for advice and lectures. Unlike four competitors, however, Stryker was not fined.

Stryker earnings are expected to increase 16 percent in 2009 versus 11 percent projected for the medical instruments and supplies industry. The five-year annualised earnings forecast of 17 percent exceeds the 13 percent expected for its peers.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, 555 N. Central Ave., Suite 302, Phoenix, AZ 85004-1248, or by e-mail at andrewinv@aol.com.