I first heard about Stryker (NYSE:SYK) in the mid-1990s and didn't think much of it. The company caught my attention again a little more than a year ago. Among other things, I'm a wildland firefighter, and I've seen Stryker's products in ambulances when I go on medical calls. Stryker is primarily known for making replacement parts for people. If you know anyone that has gotten a hip replaced, it probably came from Stryker.

In fact, Stryker has a remarkably diverse product line. In addition to replacement parts and ambulance equipment, it also makes cement, nails, screws, implants, and more to help injury victims. Then there is the biotech division, which works on harnessing a naturally occurring protein to accelerate bone repair. It also has a line of what is best described as power tools for surgical procedures.

Stryker is not cheap in nominal terms. The forward P/E is 30, its PEG is 1.8, and the price-to-sales ratio is 5.3. However, these numbers compare very well to the other companies in the medical equipment sector, making it cheap in real terms. More important, its ROE is 24%, net margins are 18%, and it carries virtually no debt.

Dr. Homer Stryker founded the firm in the 1940s. A quick look at insider activity shows that most of the sales are by Dr. Stryker's descendants, not officers of the company.

Stryker's management has a long track record of success. CEO John Brown has been running the company since 1977. Since 1984, the stock has only had three down years. Over that same time period, it has outperformed the S&P 500 by an average of 24% per year.

These are all great things, but we are looking in the rearview mirror. Looking forward, Stryker is poised to continue benefiting from longer life expectancies due to generally healthier lifestyles and medical innovation. This clear demographic trend is fueling revenue growth and will benefit many health-care stocks, Stryker included.

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Fool contributor Roger Nusbaum is an investment manager and wildland firefighter in Prescott, Ariz. He has no position in any of the companies mentioned, but his clients have owned Stryker since Sept. 2003.