The robot revolution isn’t coming. It’s already here. Increasingly, our lives are dominated by robots that come in a variety of forms. In many cases, we are aware of the robots that are vacuuming our floors, delivering packages to our homes, or providing directions to us in our cars. But in many other instances, we are unaware that robots are assisting doctors in performing surgery on us, manufacturing the appliances we use every day, and responding to us in customer-service chats. Robots have become commonplace in modern life. And the trend is only likely to continue. With the robot revolution in full swing, here are the three best robotic stocks to buy for 2023.
The global robotics market will reach $214.68 billion by 2030 and is expected to increase at a compound annual growth rate of 22.8%, according to Market Research Future. Unsurprisingly, leading companies are looking to get in on the action.
This past August, e-commerce giant Amazon (NASDAQ:AMZN) struck a deal to acquire iRobot (NASDAQ:IRBT) for $61 a share in an all-cash deal valued at $1.7 billion. iRobot is best known as the maker of household robots such as the Roomba vacuum cleaner and other devices that carry out chores on behalf of consumers.
|KRKNF||Kraken Robotics||43 cents|
|BOTZ||Global X Robotics and Artificial Intelligence ETF||$21.25|
Best Robotic Stocks for 2023: Kraken Robotics (KRKNF)
We’ll start with a small, highly specialized company called Kraken Robotics (CVE:PNG). Based in the Canadian province of Newfoundland, Kraken Robotics is a marine technology company that manufactures underwater robots and robotic systems that are used to scan and map the ocean floor, lay cable at the depths of the ocean, and tow equipment deep underwater using submersible robotic vehicles. The company gets most of its business from the offshore oil, gas, and renewable energy sector. Kraken Robotics also has some military contracts, most notably with the Canadian Navy.
While Kraken Robotics’ share price is deep down in penny-stock territory and trading at just 43 cents, there are a lot of reasons to like this security.
PNG stock has risen 53% in 2022, is up 61% in the past 12 months, and has gained 222% over the past five years. And it’s not a meme stock. The stock’s gains have accumulated at a steady, sustained pace. Another reason to be bullish on Kraken Robotics is that the company has acquired PanGeo, another tech company that will help diversify Kraken’s revenue streams and enhance its underwater imaging offerings.
Lastly, Kraken is helping to pioneer Robotics-as-a-Service (RaaS), which involves companies paying a recurring fee for access to the company’s various underwater robotics products, services and data.
From a small, specialized company we move to one of the world’s largest and most established robotics giants, Boston-based Teradyne (NASDAQ:TER). Founded in 1960 by two MIT graduates, Teradyne first set-up shop above a hot dog stand. From its humble beginnings, the company has grown to be one of the largest manufacturers of industrial robots in the world, with nearly 6,000 employees and annual revenues of $3.70 billion. While the company also tests electronics products ranging from semiconductors to laptop computers, it is the development of robots that really powers its business these days.
Specifically, Teradyne specializes in what are known as “collaborative robots,” or “cobots.” These are robots that work alongside humans in industrial manufacturing and on assembly lines, helping to make everything from cars to refrigerators. Increasingly, Teradyne’s robots are also used in sectors ranging from farming to warehouses, where they help to harvest crops and move heavy loads.
Like all large technology companies, TER stock has gotten smoked this year, down 44% in 2022 and trading at $93 a share. However, its share price is up 120% over the past five years. The stock’s price-earnings ratio of 20 is reasonable, and it pays a quarterly dividend of 11 cents a share, which is good for a yield of 0.48%. That’s not bad, considering most tech stocks pay no dividend at all.
Global X Robotics and Artificial Intelligence ETF (BOTZ)
We’ll end with an exchange traded fund (ETF) that covers the spectrum of the robotics and artificial intelligence space. The Global X Robotics and Artificial Intelligence ETF (NASDAQ:BOTZ) is one of several exchange traded funds that is focused on the growth of the robotics sector. The fund currently has net assets of $1.34 billion, and its main holdings include leading robotics companies such as ABB (NYSE:ABB), Intuitive Surgical (NASDAQ:ISRG), and UIPATH (NYSE:PATH). The fund also holds shares of technology giants such as Nvidia (NASDAQ:NVDA), whose semiconductors and microchips power robots, AI, and super computers around the world.
The ETF’s expense ratio is mid-range at 0.68%, and it pays a semi-annual dividend of 5 cents a share for a yield of 0.26%. While the BOTZ ETF is down 41% in 2022 and trading at $21.25 a share, it has gained 44% since its inception in 2016.
Most of its holdings consist of established robotics and AI companies that have been around for years if not decades. There are very few start-up or speculative holdings in the fund. For investors who are interested in gaining exposure to the growth of the robotics sector, the BOTZ ETF could be the way to go. The diversity of the fund’s holdings also helps to lower the potential risks that can come with owning the stock of a single company in a burgeoning industry such as robotics.
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.