3 Strong Buy IoT Stocks to Add to Your Q2 Must-Watch List


  • Invest in strong buy IoT stocks and tap into a decade of robust growth
  • Aptiv (NYSE: APTV): Aptiv’s robust automotive technologies business could get a major shot in the arm from IoT,
  • Badger Meter (NYSE: BMI): With more than a 20% bump in sales and consistent quarter-over-quarter earnings beats, Badger Meter is set to capitalize on the smart water technology wave.
  • Pegasystems (NASDAQ: PEGA): Pegasystems’ integration of AI and IoT into industrial solutions shows promising forward momentum.
Strong Buy IoT Stocks - 3 Strong Buy IoT Stocks to Add to Your Q2 Must-Watch List

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I recently stumbled on a fascinating TEDx video on my YouTube feed the other day. Self-described tech geek Benson Hougland talked about the marvels of the Internet of Things (IoT) and how it’s a major step-change in technology. Evolving from an internet of people to a massive network connecting objects, IoT represents the future of the internet. This evolution introduces a new era of digital intelligence across various objects, proving to be a game-changer for businesses globally. Hence, investing in strong buy IoT stocks could pay many dividends over the long term. The video is almost a decade old, and investors have already made substantial gains from the industry.

The Global X Internet of Things ETF, for instance, has delivered a robust 104% total return in the past years, ahead of the S&P 500. Moreover, the trend is unlikely to stop anytime soon, with MarketsandMarkets predicting the IoT industry to grow at a staggering 16.7% CAGR from 2021 to 2026, reaching $650.5 billion.

Aptiv (APTV)

An Aptiv (APTV) office building in Poland.
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Automotive tech giant Aptiv (NYSE:APTV) ticks virtually all the boxes for an excellent investment. It specializes in automotive technologies, with a goal of becoming a one-stop shop for technology integration in the automotive sphere. In doing so, it has grown its revenue base by a staggering 85% from 2015 to 2023.

Its Connected Services unit is its IoT division, which offers powerful solutions including advanced data analytics software and data recorders for vehicles in the pre-production and production phases. Moreover, its partners operate a subscription-based revenue model, indicative of a healthy long-term income stream for the company. Aptiv’s rapid expansion is unlikely to slow down anytime soon, as it is backed by multiple secular tailwinds in the automotive space.

Moreover, the growing demand for in-car connectivity and technology-driven solutions opens up massive long-term growth opportunities for Aptiv, positioning it for double-digit growth. Given the breadth of positives with APTV stock, Tiprank’s
analysts estimate a 39% upside from current prices.

Badger Meter (BMI)

A magnifying glass zooms in on the website for Badger Meter Inc (BMI).
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Badger Meter (NYSE:BMI) is one of the oldest players in the water utilities space, providing flow measurement, quality, and control solutions globally. Over the years, it has
become a more interconnected business, broadening its vision to embrace connectivity and intelligence offered by IoT. The strategic shift enables the firm to substantially improve water management through innovative monitoring of flow and quality.

It has outperformed its historical metrics in recent quarters, posting double-digit across both lines. In its most recent quarter, revenues shot up $182.4 million, a 24% improvement year-over-year (YOY), beating estimates by over $204,000. Moreover, its EPS of 84 cents beat estimates by two cents. Its fourth-quarter (Q4) results marked the fourth consecutive quarter where it comfortably eclipsed analyst estimates. As we advance, the company will benefit from the greater adoption of smart water technologies and an infrastructure boom in the coming years.

Pegasystems (PEGA)

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Pegasystems (NASDAQ:PEGA) is a software giant that productively blends AI, robotic process automation (RPA), and IoT capabilities. Its AI-powered smart manufacturing solutions are a novelty, targeting industrial and blue-collar sectors. These robust solutions
allow customers to address various labor problems, including the automation of
mundane tasks and workforce optimization.

Furthermore, it efficiently layers IoT into its offerings, focusing on making more informed decisions through real-time data analytics. Moreover, it takes its IoT-enhanced insights to the next level through its prowess in case management and business process management (BPM). Additionally, there’s also an emphasis on proactive preventive measures through Pega Machine Health, which optimizes the health of connected IoT devices.

It has operated a consistent business over the past several years, with its 5-year average revenue growth at roughly 9%. Moreover, it has made impressive strides in growing
its free cash flow per share from 74 cents in 2015 to $2.42 last year. Forward
projections are encouraging across both lines and are expected to continue on
its strong growth trajectory.

On the date of publication, Muslim Farooque 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

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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