3 Robotics Stocks Powering the Automation Revolution
The robotics market is at the forefront of the automation revolution, driven by innovative breakthroughs in AI, machine learning, and improved safety features. This rapid advancement signifies a golden opportunity for investors interested in the growing landscape of robotics, which is reshaping various sectors, including air defense and medical technology. With the projection of substantial growth in this industry, here we explore three leading robotics stocks: RTX Corporation (RTX), Stryker Corporation (SYK), and Medtronic plc (MDT).
The Robotics Revolution and Its Impact
The integration of robotics and AI is transforming industries significantly. In the realm of air defense, robotics is enhancing soldier training, optimizing the use of unmanned aerial vehicles (UAVs), and improving logistic operations. This promises to increase combat effectiveness and improve cybersecurity measures as drone technology and autonomous systems evolve. As the industry progresses, analysts forecast a 14.7% compound annual growth rate (CAGR) for the global robotics market, expected to reach $283.19 billion by 2032.
Moreover, robotics is revolutionizing healthcare by introducing technologies that allow for precise surgeries, faster diagnoses, and improved rehabilitation processes. The global medical service robotics market alone reached $11.2 billion in 2024, with expectations to nearly double to $21 billion by 2028.
1. RTX Corporation (RTX)
RTX Corporation, a leader in the aerospace and defense sector, serves both commercial and military markets across the globe. The company operates through three divisions: Collins Aerospace, Pratt & Whitney, and Raytheon. In recent developments, RTX’s Raytheon secured full-rate production approval for its SM-3 Block IIA missile, a significant stride in its defense collaboration with Japan. Additionally, the company was awarded a $736 million contract from the U.S. Navy for AIM-9X Sidewinder missiles, reaffirming its stronghold in missile defense.
Financially, RTX exhibits robust performance with a trailing-12-month levered free cash flow (FCF) margin of 12.99%, outperforming the industry average of 6.55%. The second quarter of 2024 saw a 7.7% increase in sales to $19.72 billion. The company’s adjusted net income remained stable at $1.90 billion while its earnings per share (EPS) rose by 9.3% year-over-year to $1.41.
Over the past year, RTX shares have surged by 70.2%, closing at $125.75. Its POWR Ratings reflect strong fundamentals, holding a rating of B (Buy) across categories like Growth, Momentum, and Sentiment.
2. Stryker Corporation (SYK)
Stryker Corporation is a prominent medical technology company that operates through two main segments: MedSurg and Neurotechnology and Orthopaedics and Spine. Recently, Stryker completed the acquisition of Vertos Medical, enhancing its offerings for chronic lower back pain management. Furthermore, the company is expanding its healthcare IT capabilities with AI-assisted virtual care technologies.
Stryker’s trailing-12-month EBIT margin of 20.71% vastly exceeds the industry average of 2.66%. For Q2 2024, SYK’s net sales reached $5.42 billion, marking an 8.5% increase year-over-year. The adjusted EPS rose by 10.6% to $2.81, while net earnings increased by 11.2% to $1.09 billion.
The stock has appreciated by 33.8% over the past year, closing at $359.73. With a consistent track record of exceeding earnings expectations, Stryker holds strong potential in the medical device sector with a POWR rating of B.
3. Medtronic plc (MDT)
Medtronic, headquartered in Dublin, specializes in device-based medical therapies across multiple healthcare domains. The portfolio includes cardiovascular, neuroscience, surgical, and diabetes management solutions. Recently, Medtronic launched new technologies for its spine surgery ecosystem and secured FDA approval for its Simplera continuous glucose monitor.
Medtronic demonstrates impressive financial metrics with a trailing-12-month gross profit margin of 65.52%, significantly higher than the industry average of 57.66%. In its first-quarter results for the period ending July 2024, net sales grew by 2.8% to $7.92 billion, and net income surged by 31.7% to $1.04 billion.
Over the past year, MDT’s stock increased by 23.3%, closing at $89.79. The company enjoys a positive growth outlook and is rated B in terms of overall performance and growth potential.
Conclusion
As the automation revolution continues to gain momentum, investing in robotics stocks like RTX, Stryker, and Medtronic presents a promising opportunity for investors looking to capitalize on their growth potential. From enhancing military capabilities to revolutionizing healthcare practices, these companies are at the forefront of the robotics market, ensuring a bright future ahead.