As dividend growth investors, we seek, to the best of our ability, long term sustainable growth in sectors and industries that we perceive to have strong tailwinds for the foreseeable future. One such sector that’s often touted as being extremely resilient with a lot of room for future growth is the health sector. We’ve all heard about our aging population and the need for health care facilities and the REITs that offer such physical real estate for this field along with exciting biotech companies that promise a lot of future growth and dividend growth coupled with extreme volatility and the big pharmaceutical companies providing cutting edge drugs to enhance and elongate our lives. But what about the less exciting, yet just as important medical devices sector? These are the companies that do not make the exciting headlines yet have and continue to provide very reliable, sustainable and predictable dividend distributions for multiple decades.

The medical devices industry is massive and sees $370 billion in sales globally each year. It is this industry that develops and distributes the less exciting medical devices that are used globally each day. Devices such as syringes, scalpels, catheters and implantable pacemakers to name a few. One might think of this sub-sector of the health industry as similar to a consumer staple business. No cutting edge new drugs or genetic breakthroughs here, just good old fashioned “medical hardware” that makes taking care of the sick a little easier. Of course, with this stability and reliability comes less volatility in general. With that being said I’d like to take an overview of some of the larger players in this space.

First up, is Stryker Corporation (SYK). Based in Kalamazoo, Michigan, SYK develops implants for use in hip and knee joint replacements as well as various types of surgical and emergency medical equipment. Currently yielding a relatively low 1.56% with an equally low payout ratio of just 27.0%, SYK has plenty of room to continue paying and raising its dividend based on current cash flow. SYK has been paying dividends for well over two decades and has been raising it’s dividend at an impressive rate the last five years with an annualized dividend growth rate of 17.57% during that time. With a current PE of 25.8, SYK is trading below its five year average PE of 29.4. Of course, a four star rating from Morningstar doesn’t hurt either.