Today I'm going to tell you about a medical company that, within the next two months, I'll be buying into with $4,000 of my own money. I'm so confident that my pick will outperform the market that if I sell any shares within the next three years, I'll donate $100 to charity.

I fully expect today's pick, Intuitive Surgical (Nasdaq: ISRG), to handily trounce the market because of its state-of-the-art da Vinci surgical robots.

No Pepsi to their Coke
Founding Fool David Gardner loves to look for companies that don't -- as he puts it -- have "a Pepsi to their Coke."

What does David mean by this? He means that he loves finding companies that are doing things that no one else is doing. Right now, Intuitive Surgical has that competitive advantage.

Sure, there are plenty of other medical companies out there to invest in. Johnson & Johnson (NYSE: JNJ) is the closest thing to a health-care conglomerate out there, and it's surely a safe bet for your investment dollars. Stryker (NYSE: SYK) would be a solid place for your money as well, since its medical implants and equipment business is doing well enough to enable it to pay a solid 1.2% dividend. Neither of these companies, though, competes with Intuitive.

The closest thing to direct competition is probably MAKO Surgical (Nasdaq: MAKO), which has developed a robotic arm solution for knee and hip replacements. But even MAKO does not focus on the same procedures as Intuitive's da Vinci robot, which can perform urological, gynecological, cardiothoracic, and head and neck surgeries.

Essentially, Intuitive's main competition comes from traditional surgery. And with its ability to perform surgeries that are less invasive than manual surgery, the da Vinci is becoming the option of choice for patients.

A profitable model
If you are a male and turned 18 during the late '90s, you may have received a Mach 3 razor in the mail on your birthday. I know I did, and after trying it, I was a lifetime customer. Gillette made its money off my continued purchase of those expensive razor blades.

Several companies have copied this "razor and blades" model successfully. Those who are in the business of producing ink printers are a textbook example, giving the printer away for basically nothing, while charging high fees for the ink cartridges.

In less dramatic fashion, Intuitive has taken this model and applied it to the medical field. Its da Vinci robots are still expensive on an absolute basis (more than $1 million), but continued orders for parts and maintenance on these machines really drives Intuitive's profits.

The more doctors learn how to use the machines, the more popular the procedures become, which leads to even more orders for reusable parts. Investors in Intuitive's stock, therefore, want to keep a close eye on both the number of new da Vincis ordered, but also the number of procedures performed.

Financial fortitude
Intuitive's cash on hand has been growing steadily, up 13% since the beginning of the year to $1.8 billion. The company was also able to eliminate all of its long-term debt at the end of 2010.

Perhaps most importantly, for a growing company that must invest heavily in research and development, free cash flow has been growing at a healthy clip. From the end of 2009 to the end of 2010, free cash flow grew by 30% to top out at $432 million.

A balance sheet like this tells me that the company will be able to fund its future growth from its own cash flows instead of needing to use debt -- definitely a positive sign for a company that already has so much going for it.

Foolish takeaway
This is the eighth article in a series that I'm writing about my retirement portfolio, which I'm dubbing "The Cheesehead Portfolio" in honor of my home state of Wisconsin. If you'd like to see my first seven selections for the portfolio, check them out below.

But if you want a second opinion on stocks for your retirement account, The Motley Fool has recommended many other strong companies. If you'd like access to a report on "5 Stocks The Motley Fool Owns -- And You Should, Too, it's yours -- absolutely free.

Fool contributor Brian Stoffel owns shares of Intuitive Surgical. The Motley Fool owns shares of PepsiCo, Coca-Cola, and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson, Intuitive Surgical, PepsiCo, Coca-Cola, MAKO Surgical, and Stryker. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.