With the increasing demand for automation systems across several sectors, including industrial machinery, healthcare, manufacturing, and logistics, coupled with the rapid adoption of emerging technologies such as AI and machine learning, the robotics industry continues to grow and innovate significantly.
Amid this backdrop, fundamentally sound robotics stocks Stryker Corporation (SYK), Honeywell International Inc. (HON), and Medtronic plc (MDT) could be ideal watchlist additions.
The ongoing market transformation with cutting-edge technologies continuously extends its reach beyond tech into fields like industrial machinery and medical devices and equipment. Currently, over 3.4 million industrial robots are in use worldwide, and industrial companies plan to spend over 25% of their capital on robots in the next five years.
Driven by rapid industrialization, increasing demand for manufacturing automation, enhanced efficiency, cost reduction, and improved product quality, the global industrial robotics market is expected to experience robust growth. The market is expected to grow over $51.78 billion by 2032, expanding at a CAGR of 7.7% during the forecast period (2024-2032).
Further, robotics has revolutionized patient care and operational efficiency. Automated systems can process vast amounts of medical data, enabling healthcare professionals to make informed decisions quickly, resulting in enhanced surgery precision, improved patient monitoring, and streamlined administrative tasks.
The global medical service robotics market generated a revenue of $11.20 billion in 2024, and the market is anticipated to grow to nearly $21 billion by 2028.
Given the industry’s bright prospects, watching fundamentally strong robotics stocks SYK, HON, and MDT could be wise now.
Let’s discuss the fundamentals of these stocks in detail:
Stryker Corporation (SYK)
SYK operates as a medical technology company. The company operates in two segments: MedSurg and Neurotechnology and Orthopaedics and Spine. The company provides implants for use in total joint replacements, like hip, knee, and shoulder, as well as trauma and extremities surgeries.
On August 22, SYK entered a definitive agreement to acquire Vertos Medical Inc., a privately held company offering a minimally invasive solution for treating chronic lower back pain. The strategic acquisition strengthens SYK’s minimally invasive pain management portfolio with differentiated treatments and expands its reach across ambulatory surgery centers.
On August 12, SYK entered into a definitive agreement to acquire care.ai, a privately held company that delivers AI-assisted virtual care workflows, smart room technology, and ambient intelligence solutions. The strategic acquisition strengthens SYK's growing healthcare IT offering and wirelessly connected medical device portfolio.
During the second quarter that ended on June 30, 2024, SYK’s net sales increased 8.5% year-over-year to $5.42 billion. Its adjusted gross profit grew 9.1% from the year-ago value to $3.48 billion. The company’s adjusted operating income of $1.33 billion indicates growth of 9.7% from the prior year’s quarter.
In addition, the company’s adjusted net earnings and adjusted EPS came in at $1.08 billion and $2.81, up 11.2% and 10.6% year-over-year, respectively.
Analysts expect SYK's revenue for the third quarter (ending September 2024) to grow 9.4% year-over-year to $5.37 billion, and its EPS for the same period is expected to increase 12.6% year-over-year to $2.77. Furthermore, the company surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
SYK’s shares have gained 7.8% over the past month and 25.5% over the past year to close the last trading session at $360.42.
SYK’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Growth, Sentiment, and Stability. Within the Medical – Devices & Equipment industry, SYK is ranked #31 out of 132 stocks.
Click here to access additional ratings of SYK for Value, Momentum, and Quality.
Honeywell International Inc. (HON)
HON engages in aerospace technologies, building automation, energy and sustainable solutions, and industrial automation businesses internationally. It operates through Aerospace; Honeywell Building Technologies; Performance Materials and Technologies; and Safety and Productivity Solutions segments.
On August 14, HON launched INNCOM Direct, an easy-to-install energy management system that uses automation to help improve energy efficiency in mid-market hotel properties. Its launch supports HON's alignment of business around three compelling megatrends, including automation and the energy transition.
On July 22, HON was selected by United Airlines to provide a wide range of avionics for new 737 MAX aircraft set up to enter service over the next decade, including technologies such as the industry's only 3D weather radar, flight recorders, and advanced traffic avoidance systems.
Also, on July 10, HON acquired the liquefied natural gas (LNG) process technology and equipment business of Air Products and Chemicals, Inc. (APD) for $1.81 billion in an all-cash transaction. The acquisition enhances HON’s energy transition capabilities, providing a comprehensive end-to-end solution for customers globally.
For the second quarter which ended on June 30, 2024, HON’s net sales increased 4.7% year-over-year to $9.58 billion. Its operating income of $1.98 billion reflects a growth of 5% from the prior year’s quarter. The company’s net income attributable to Honeywell and EPS stood at $1.54 billion and $2.36, up 3.8% and 6.3% year-over-year, respectively.
According to the company’s updated 2024 outlook, HON expects its sales to range between $39.10 billion and $39.70 billion. It also anticipates adjusted EPS in the range of $10.05 to $10.25, reflecting a solid increase of 6% to 8%. And its free cash flow has been raised to $5.50 billion - $5.90 billion for the full year.
Street expects HON’s revenue and EPS for the third quarter (ending September 2024) to increase 7.8% and 10.2% year-over-year to $9.93 billion and $2.50, respectively. Moreover, the company surpassed the consensus EPS estimates in all four trailing quarters, which is impressive.
HON’s stock has increased 4.6% over the past six months and 10.3% over the past year to close the last trading session at $207.91.
HON’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Stability. Within the A-rated Industrial - Machinery industry, HON is ranked #34 out of 78 stocks.
In addition to the POWR Ratings we’ve stated above, we also have HON ratings for Growth, Momentum, Sentiment, Value, and Quality. Get all HON ratings here.
Medtronic plc (MDT)
MDT develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients globally. The company operates through Cardiovascular Portfolio; Neuroscience Portfolio; Medical Surgical Portfolio; and Diabetes Operating Unit segments.
On August 15, MDT's Board of Directors approved a cash dividend of $0.70 per share for the second quarter of fiscal year 2025. The quarterly declaration is consistent with the dividend increase announced by MDT in May 2024. The dividend is payable on October 11, 2024, to shareholders of record at the close of business on September 27, 2024.
MDT pays an annual dividend of $2.80, which translates to a yield of 3.16% at the current share price. Its four-year average dividend yield is 2.74%. Moreover, the company's dividend payouts have increased at a CAGR of 6.3% over the past five years. Furthermore, its annual dividend payment has increased for the past 47 consecutive years.
On August 7, MDT announced that the FDA approved its Simplera™ continuous glucose monitor (CGM). It is MDT’s first disposable, all-in-one CGM, which is half the size of previous models and easier to use. The company expanded CGM offerings to meet more people where they are in their diabetes journey.
The company also announced a global partnership with Abbott to create an integrated CGM based on Abbott’s most advanced CGM platform, which will work exclusively with MDT’s smart insulin device. The strategic collaboration bodes well with the company and is expected to boost its Diabetes revenue.
MDT’s net sales increased 2.8% year-over-year to $7.92 billion for the first quarter, which ended July 26, 2024. Its non-GAAP operating profit grew 2.3% from the year-ago value to $1.95 billion. Net income attributable to Medtronic and EPS came in at $1.04 billion and $0.80, up 31.7% and 35.6% from the prior year’s quarter, respectively.
The company raised its fiscal year 2025 guidance, increasing its revenue growth projection to a range of 4.5% to 5%. It has also adjusted its non-GAAP EPS guidance to a new range of $5.42 to $5.50, slightly higher than the prior forecast of $5.40 to $5.50. This revised guidance suggests a 4% to 6% growth in non-GAAP EPS.
Street expects MDT’s revenue and EPS for the third quarter (ending January 2025) to increase 3.9% and 5.6% year-over-year to $8.41 billion and $1.37, respectively. Also, the company has topped the consensus EPS and revenue estimate in all four trailing quarters, which is remarkable.
Shares of MDT have surged 10.1% over the past month and 7.6% over the past year to close the last trading session at $88.58.
MDT’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
MDT has a B grade for Stability and Value. It is ranked #17 out of 132 stocks in the Medical – Devices & Equipment industry.
In addition to the POWR Ratings we’ve stated above, we also have MDT ratings for Quality, Growth, Momentum, and Sentiment. Get all MDT ratings here.
What To Do Next?
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SYK shares were trading at $360.42 per share on Monday morning, up $2.49 (+0.70%). Year-to-date, SYK has gained 20.92%, versus a 19.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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