Advancement in technology is an inevitability which forces all of us to adapt to new realities. As such, the best stocks to buy for the long haul invariably focus on automation and artificial intelligence. But while progress is always a net positive, the transition is certainly a painful one.
What I like, though, about this current political season is that we finally have a candidate who’s addressing this issue. Democratic presidential candidate and former tech entrepreneur Andrew Yang knows first-hand the benefits of automated innovations. At the same time, he’s also aware of the darker side of surging automation stocks: displaced workers and forgotten communities.
In principle, this drive for viable solutions underlines Yang’s so-called “freedom dividend.” A form of universal basic income, Yang proposes giving every American over the age of 18 a check for $1,000. He views this as the best way to give struggling families a chance to catch up to the exploding valuations of tech stocks, which in many ways is emblematic of these workers’ displacement.
While Republicans remain wary of Yang’s proposal as undisguised socialism, his plan is the only one addressing massive changes ahead. The old mantra of “working hard” no longer is valid. After all, you can’t work harder than a robot. Plus, putting money into American workers’ hands gives them an opportunity to profit off these automation stocks to buy.
Finally, what I find refreshing about Yang is his matter-of-fact approach. Not once has he called for stopping automation or tech stocks. Rather, he wants the U.S. to adapt to the shifting landscape before our adversaries do.
A freedom dividend is just one step toward managing an exciting future. The other? Investing in these 10 automation stocks to buy:
Rockwell Automation (ROK)
If you’re seeking automation stocks to buy, it doesn’t hurt to consider a company with the word already written in its name. That’s the case for Rockwell Automation (NYSE:ROK), which specializes in industrial technologies. However, what makes ROK different is that they approach automation from a holistic standpoint, ensuring every cog in the gear works seamlessly.
Another reason why you’ll want to take a closer look at ROK is its financial stability. Unlike upstart tech stocks, Rockwell is in the long-haul business. The company features strong profitability margins, along with steadily increasing revenues over the past three years. Additionally, Rockwell sports a stable balance sheet with manageable debt.
Year-to-date, ROCK stock is up over 20%, despite an earnings miss that battered the stock today. While industrial operations is a legacy industry, automated operations is an entirely different story. Plus, with a 2.2% dividend yield, ROK is one of the most well-rounded automation stocks to buy — this dip could just make a better entry point.
Honeywell (NYSE:HON) is a massive, multi-specialty firm that’s competing against an increasingly nimble and agile industry. Under such circumstances, HON stock has no business being among the best tech stocks to buy. Still, the company does big and complicated quite well, which is not something I can say about its peers.
Here’s what I love about HON stock: despite enjoying legacy status, Honeywell never rests on its laurels. Its automation systems cover a wide breadth of industries, including smart HVAC for corporate buildings and hotel rooms. Furthermore, they’re involving in critical airflow control mechanisms, such as the systems that leading hospitals adopt.
Additionally, Honeywell features strongly in multiple civilian and military products. Since opportunities abound for both segments, I see HON as one of top long-term stocks to buy.
When most people think about automation stocks, they usually conjure up images of giant robots on the assembly line. However, the real innovation is in the small details: we’re talking components such as sensors, switches and motor-control centers that are geared specifically for AI-based platforms. That’s exactly what Eaton (NYSE:ETN) focuses on.
The beauty of ETN stock is that the underlying firm’s products are found everywhere, not just on the assembly line. For instance, Eaton has a commercial vehicle division that specializes in control buttons and switches. They also have a similar unit that produces these products for aircraft.
After a dip in late 2015 through early 2016, Eaton is on a steady recovery path. Since that time, annual revenues have ticked higher, while management worked on controlling its debt exposure. On a YTD basis, ETN is up 23%.
Primarily, the reason why automation stocks present so much longer-term opportunity is the piggyback effect. Innovations in this sector don’t just occur in a vacuum. Instead, many industries piggyback off a base innovation, which then leads toward multiple benefits.
A great example is ABB (NYSE:ABB). Known largely for its industrial work, ABB recently generated headlines for developing satellite-mounted optical equipment. This system is able to measure greenhouse gases in the atmosphere, facilitating fact-based debates on climate change.
It’s the automation industry’s ability to morph into different applications that makes ABB stock a compelling, contrarian buy. Over the years, ABB has earned a name among tech stocks, but for the wrong reasons. In an effort to right the ship, management divested several business units.
While it doesn’t look great now, ABB deserves a look as one of the stocks to buy this year. It’s an exceptionally relevant company that’s going through a difficult restructuring process. Once finished, ABB can surprise people — in a good way, this time.
Automation stocks to buy don’t always focus on physical equipment, although that is undeniably the popular image. Instead, some of the technologies developed in the automation and AI sphere has produced profound innovations in augmented reality.
According to software and services firm PTC’s (NASDAQ:PTC) website, software developers will make the most use out of AR technologies. That’s not surprising. However, what is surprising is that the industrial products segment comes in a close second, while the automotive and education sectors are closing the gap.
Furthermore, several job functions will integrate the AR platform heavily, including design, manufacturing, and marketing and sales. This is why Andrew Yang is so passionate about his freedom dividend and the coming automation wave. With it, American families can receive quality, relevant education toward the jobs of tomorrow.
That’s also a plus for PTC stock, where the underlying company champions AR-based services.
While Yang’s extensive economic plans have energized the Democrats, not all political changes are so positive for the markets. Take for example the constant complaints over high pharmaceutical prices and the calls for a single-payer healthcare system. Such news has brought wild volatility to the publicly traded healthcare stocks.
Against that backdrop, you wouldn’t expect Danaher (NYSE:DHR) to do well this year. Though not a really a healthcare company, DHR creates products and automated systems for the life sciences and diagnostics business. However, DHR shares are up over 27% YTD, making them one of the top-performing stocks to buy of 2019.
While you can expect a cooldown after such a robust rally, DHR stock should soon find its groove. Automation hasn’t just made our lives easier; it has brought substantive changes to our health, expanding the possibilities of medicine. Danaher will lead these developments as we move further into the 21st century.
Intuitive Surgical (ISRG)
On a similar note, investors — particularly those with a contrarian mindset — should consider Intuitive Surgical (NASDAQ:ISRG). Recently, ISRG stock crumbled on news that a Canaccord analyst downgraded the surgical-systems company. To be fair, Intuitive Surgical didn’t really impress in its last earnings disclosure.
That said, those who dumped shares probably found motivation strictly from nearer-term considerations. Those with a farther outlook can see what most bulls see: a radical shift in medical expectations with the minimally invasive da Vinci surgical system. Rather than replace human doctors, da Vinci provides surgeons with an accretive platform.
In the future, we can expect this and related systems to allow surgeons to perform previously impossible surgeries. From both a monetary and humanitarian standpoint, ISRG stock offers tremendous potential. Therefore, I’d put ISRG on a list of stocks to buy, especially on this dip.
HollySys Automation Technologies (HOLI)
Headquartered in China, HollySys Automation Technologies (NASDAQ:HOLI) suffered badly in 2018 due to the trade war and geopolitical tensions. Last year, HOLI stock dropped almost 22% in the markets. It’s off to a much better start this year, though, gaining over 21% since the beginning of January.
While I’m not the biggest fan of Chinese stocks, I can appreciate HOLI for its relevancy in a still-rising economic power. Indeed, if we elect another president who spouts useless mantras that tickle the soul but do nothing for the wallet, China will almost certainly overtake us.
I’m hoping that scenario doesn’t become a reality anytime soon. But from a purely investment point-of-view, you can trust HOLI stock. If we’ve learned anything, it’s that progress doesn’t stop for anyone.
MKS Instruments (MKSI)
A leading producer of customizable automation platforms, MKS Instruments (NASDAQ:MKSI) is one of the lesser-known automation stocks. That’s a benefit to shrewd investors, who can look at the company’s fundamental strengths. For instance, MKS stock is buoyed by the organization’s strong profitability and growth metrics, as well as a reasonably stable balance sheet.
But what really caught my attention was MKS’ business diversity. Along with its semiconductor, industrial technologies and biologics divisions, MKS also features prominently in defense. Specifically, the company manufacturers LIDAR, which is a ranging and remote sensing system. As defense and security concerns transition to asymmetric threats, meeting 21st century problems with equitable solutions is a non-negotiable.
The profound benefits associated with the company haven’t gone unnoticed. On a YTD basis, MKSI is up over 56%, making it one of the best-performing automation stocks. Considering last year’s high of over $127, MKSI still has room to run.
Mitsubishi Electric (MIELY)
Over the last few years, Japanese companies have disappointed contrarians hoping for a comeback. While many names were energized following Japan Prime Minister Shinzo Abe’s election victory, they failed to convincingly maintain their momentum. Others, like Mitsubishi Electric (OTCMKTS:MIELY), simply collapsed. Last year, MIELY stock hemorrhaged 34%.
This year, though, the narrative is different, with shares up over 22%. It doesn’t make up for the losses that shareholders incurred last year. However, it is a significant start. More importantly, the fundamentals are in place for a comeback. Despite the ugliness surrounding the company — and Japan as a whole — Mitsubishi is a leader in robotics and industrial electronics.
For instance, Mitsubishi developed the world’s fastest elevator in China’s tallest building. That’s quite an achievement, considering the historical hostilities between the two nations. Since global economic activity is shifting eastward, you’ll do well to look into MIELY stock.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.