Online retail giant Amazon (NASDAQ:AMZN) recently unveiled two new robots “Bert” and “Ernie,” designed to reduce strain on warehouse workers. These automated Amazon assistants are just the latest milestone in the road toward robotic integration into global manufacturing and business.
In fact, in first quarter of 2021 sales of industrial robots in North America jumped 20% year-over-year to 9,098 units valued at $466 million. Meanwhile, the global market for industrial robots is forecast to be worth $75.3 billion by 2026.
Here are the seven best robotics stocks to buy as “Ernie” and “Bert” hit Amazon’s warehouse:
- ABB (NYSE:ABB)
- iRobot (NASDAQ:IRBT)
- Teradyne (NASDAQ:TER)
- Intuitive Surgical (NASDAQ:ISRG)
- Cognex (NASDAQ:CGNX)
- Yaskawa Electric (OTCMKTS:YASKY)
- Hyundai Motor (OTCMKTS:HYMTF)
Robots are making it easier, more efficient and more affordable to manufacture everything from electric vehicles to laptop computers. And a growing number of robotics companies are springing up to help meet the demand.
Best Robotics Stocks To Buy: ABB (ABB)
Let’s kick things off with global powerhouse ABB. Based in Zurich, until last year ABB was the largest industrial employer in all of Switzerland. This company specializes in making robots that are used in industrial plants and manufacturing.
Its marketing campaigns claim that its goal is to create the “factory of the future” through increasing automation and the use of robots. And the company is the number one provider of robotics in China, the world’s factory floor. In fact, ABB recently announced that it’s building a new factory in Shanghai to manufacture its various robots.
A global Fortune 500 company for nearly 25 years, ABB continues to post strong financial results. The company’s first-quarter earnings beat analysts’ expectations, with revenues coming in at $6.91 billion, up 11% from the previous year. ABB’s operational earnings rose 50% to $959 million in the first quarter.
Year-to-date, ABB stock is up 20% at $33.84 a share. In the past 12-months, its stock has risen 55%. With its leading position in China and robot automation growing worldwide, ABB shares should continue trending higher.
iRobot is probably the best known robotics company on this list. That’s because it is one of the few robotics companies focused on making consumer’s lives easier. Most readers will have a passing familiarity with iRobot’s automated Roomba vacuum cleaners. Started more than 30 years ago by three MIT professors, iRobot has experimented with numerous robots over the years, including ones that clean pools and mow lawns. But it is the Roomba and its floor-washing counterpart Scooba that are iRobot’s main products.
Just as countless science fiction books and movies have predicted, consumers are relying on robots to do their chores for them. iRobot is leading the way when it comes to consumer robots and its business has been strong. iRobot beat analyst expectations with its most recent quarterly results, reporting revenue of $303 million, 58% higher than a year earlier and earnings per share (EPS) of $0.41. Analysts expected revenue of $264 million and negative EPS. IRBT stock has increased 16% year-to-date at $92.20 per share.
However, some analysts continue to feel the stock remains undervalued relative to its earnings. The median price target on the stock is $130, suggesting a potential 37% gain from current levels.
Another Boston-area robotics company started by members of MIT is Teradyne. The company was founded in 1960 and today manufactures a wide variety of robots that are used across the American business spectrum. These include what’s known as “collaborative robots” or “cobots” that work side-by-side with humans in various assembly plants, as well as on farms and metal and machining shops. Teradyne also develops robots to manage logistics and high-payload robots used for material handling and moving heavy loads in warehouses.
The company also tests semiconductors and wireless consumer electronics products such as laptop computers. However, robotics is where Teradyne’s growth is really accelerating. And the results have driven both strong financials and stock appreciation.
Over the past five years, Teradyne has grown its earnings per share (EPS) an average of 35% per year. TER stock is up 6% so far this year at $125.96. In the past year, the stock has risen 50% and it has returned 563% to investors over the past five years.
Intuitive Surgical (ISRG)
Surgery and other complex medical procedures are increasingly aided by robots. Lasers and medical instruments that are guided by robots are often more accurate and steady than a surgeon’s hands. And Intuitive Surgical is the market leader when it comes to manufacturing surgical robots, notably its da Vinci Surgical System that is used to remove part or all of the prostate gland, as well as to repair damaged heart valves.
Sunnyvale, California-based Intuitive Surgical has grown its annual revenue nearly 150% over the past decade to $4 billion. Today, Intuitive Surgical controls nearly 80% of the robotic surgery market, making it the undisputed leader in the space.
While its sales slipped over the past year due to the pandemic, they are recovering now. ISRG stock is up 13% year-to-date at just over $900 a share. In the past 52-weeks, the company’s share price has climbed 53% higher.
The greater Boston area is definitely a hub for robot manufacturing, and that is where people will find Cognex, a company that specializes in building robots and related systems for use on manufacturing assembly lines. With operations in 20 countries, Cognex has been performing well coming out of the pandemic.
In this year’s first quarter, the company reported the highest revenue and earnings in its three decade history. Revenue rose 43% from the same period last year to $239 million. Management forecasts annual revenue growth of 54% in the second quarter.
Driving the growth is a series of new products from Cognex, including a 3D smart camera system, advanced barcode readers and technology that can analyze massive numbers of images produced by Cognex’s machines. The company’s logistics business has also gotten a boost during the Covid-19 pandemic from the surge in e-commerce and Cognex’s technology is increasingly being used on electric vehicle assembly lines.
CGNX stock is down a slight 0.75% year-to-date at $79.62 a share. However, the stock is up 35% over the past 12-months.
Yaskawa Electric (YASKY)
Japanese company Yaskawa Electric makes heavy duty industrial robots. The company’s “Motoman” robots are used for welding, packaging, paint coating, cutting and material handling. And unlike a number of other names on this list, some of this company’s robots are designed to look like humans.
In Japan, Yaskawa Electric is viewed as a bellwether for technology and robotics stocks. The company’s stock dragged down the Nikkei index in February after the company’s earnings didn’t meet expectations and its share price fell 7% as a result.
Analysts and investors were disappointed after Yaskawa Electric said it anticipates a 55% jump in its operating profit to $383.67 million this year, falling just short of analysts’ forecast. Over the past year, YASKY stock is up 43% and has risen 320% over the past five years.
Moving forward, Yaskawa Electric is another company that is pushing into the fast growing electric vehicle assembly space.
Hyundai Motor (HYMTF)
Why is automaker Hyundai Motor on this list? Because the South Korean company recently bought Boston Dynamics, the robotics design company spun out of MIT in 1992.
Boston Dynamics’s humanoid and dog robots were recently featured on TV newsmagazine “60 Minutes” performing a choreographed dance routine. But its robots are primarily used by the military to carry equipment like pack mules. Recently, the company has expanded its robots for use in warehouses.
In December 2020, Hyundai Motor bought an 80% stake in privately held Boston Dynamics for $1.1 billion. Japan’s SoftBank Group (OTCMKTS:SFTBY) holds the other 20% of Boston Dynamics. Hyundai has been cagey about its plans for Boston Dynamics, but analysts expect that robotics company will be used to help develop Hyundai’s autonomous driving and safety functions. KRX:005380 stock is up 16% year-to-date and up 144% over the past 52-weeks.
Disclosure: On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.