Special Report: 3 Robot Stocks to Buy Today

Half a century ago, robots existed mostly as a science fiction trope — but today, they’re a very real part of our economy. Robots are currently toiling in our factories, cleaning our homes, performing our surgeries and protecting our soldiers. And their meteoric rise is just beginning. 

According to the Boston Consulting Group, industrial robots currently perform about 10% of all manufacturing tasks. But by 2025, that share will jump to 25%. As we’ll discuss in this report, researchers have forecast similar growth rates for consumer, medical and military robots as well. 

And despite the pervasive media narrative that the rapid rise of robots will cause massive job losses, data suggests that it’s actually a net creator of jobs. In fact, according to research by Metra Martech, each new industrial robot deployed adds an average of 3.6 jobs to the economy. 

The growth in the global robot population is expected to be strong across the board in the next few years — but there are certain sectors in which it’ll be especially apparent… 

Industrial Robots

The International Federation of Robotics (IFR) reports that in 2020, the worldwide industrial robot population hit a record of 2.7 million — with roughly 70% working in the automotive, electronics, and metal machinery industries.

robots responsive

The report showed that sales of new industrial robots had slowed slightly in 2019 — but the annual total of 373,000 units was still the third-highest sales volume ever recorded. 

According to Loup Ventures, the market for industrial robots is expected to grow by 175% from 2017–2026 — and it’s easy to see why. They free up human workers from dangerous or tedious jobs and work at a far faster pace than most humans can. 

Robots for Consumer Use

Of course, robots aren't limited to being used in industrial and manufacturing settings. The demand for service robots for consumer use has also grown significantly in recent years.

The rise of the “smart home” over the last few decades has been a major driver of consumer robot demand. 

Smart Home Interest

As people connect more and more of their home systems and appliances to the internet, more and more products are being developed to automate cleaning and other home care tasks. 

That’s a significant part of the reason why research firm Market Research Future projects that the global consumer robotics market will enjoy a compound annual growth rate (CAGR) of around 19% through 2023. 

Robots in Medicine

Robots are also playing an increasingly important role in medical technology and health care. Robots provide medical professionals with a heightened level of precision in their operations and help to improve patient care, save costs, and reduce waste.

And the automation of medicine has been going on longer than one might think. The first pacemakers — which, as autonomous therapeutic machines, are definitionally medical robots — were implanted into patients in the 1950s. 

Early Pacemaker

Since then, robots have started assisting doctors in a variety of ways to enhance their capabilities and reduce the risk of error. 

The Centers for Disease Control and Prevention (CDC) recently presented data demonstrating that one in every 25 patients will contract an infection while in a hospital — and that one in nine of this portion of patients will die. It recommended the implementation of automated cleaning protocols — led by medical robots — to reduce these risks. 

Between the demand for more sophisticated sanitation solutions and the robust demand for surgical and implanted medical robots, it’s no wonder why research firm Fortune Business Insights projects a 21.5% CAGR for the medical robots industry through 2026. 

Unmanned Aircraft Systems

Unmanned aircraft systems (UAS) — colloquially known as drones — have taken military technology and defense to the next level. These systems have given the military new, innovative ways of gathering intelligence, neutralizing enemies, and protecting soldiers and assets.

Drones have played key roles in almost every significant U.S. military operation of the last 10 years. They fired the missiles that killed notorious ISIS spokesman Mohammed Emwazi, aka Jihadi John, and took the photos that identified Osama bin Laden’s compound. Below is one such drone photo, which was leaked to the press several years ago… 

Drone Image

It’s not hard to see why intelligence firm Markets and Markets has projected a CAGR of 15.5% for UASs through 2025.

As you can see, robot technology is just beginning its meteoric rise — and will see especially strong growth in the industrial, consumer, medical, and military segments. Based on these projections, we've made a watchlist of four robot stocks to consider...

1. iRobot Corporation (NASDAQ: IRBT)

IRobot Corporation is a consumer robotics company founded in 1990 by three MIT engineers with space and military robotics backgrounds. 

Today it designs and builds cleaning robots for consumers. Its products automatically complete tasks like vacuuming, mopping, scrubbing floors, and cleaning pools and gutters.

iRobot's most popular product is its Roomba vacuuming robot, which uses an array of cameras to navigate around furniture, walls, and other obstacles as it cleans floors. The Roomba was introduced nearly 20 years ago in 2002, making it one of the first non-toy autonomous robots on the consumer market. 

Today the Roomba controls 82% of the North American robotic vacuum market and 52% of the global market. Yet despite its dominance in the area, iRobot is still quite comfortably valued — and is still finding room for growth. 

As of the most recent quarter, the firm has grown its EPS by 16.72% year over year while growing revenue by 8.07%. It has an extremely low debt-to-equity ratio of 7% and trades for less than 16 times EPS and less than two times sales. 

2. ABB Ltd. (NYSE: ABB)

ABB is a global provider of power and automation solutions. According to engineering magazine Control, it’s the third-largest automation vendor worldwide by revenue thanks to its diverse line of products. 

ABB's YuMi is the first robot to work with people while still maintaining a safe environment. YuMi is a dual-arm robot capable of working in small parts assembly roles, which have previously been difficult to automate. 

The company’s IRB 8700 is a robot designed for heavy payloads. It's 25% faster than any other robot in its size class and provides customers with low-maintenance care and a low total cost to own.

The demand for industrial robots is set to nearly triple over the next decade — and ABB’s market share has been rising within that segment, from 17% in 2015 to nearly 30% today. 

What’s more, the firm is immensely profitable and undervalued, with a return on equity (ROE) above 39% and a price-to-earnings (P/E) ratio of less than 12. 

3. AeroVironment Inc. (NASDAQ: AVAV)

AeroVironment is a California-based developer of unmanned aircraft systems (UAS) for the U.S. military and foreign allied militaries. It has sold at least 25,000 drones to military customers in the 10 years that it has been operating in that industry. 

The company's most popular drone, the lightweight Raven, is the most widely used UAS in the world. It garnered more than $43 million in orders in the last six months alone from a variety of NATO governments. 

Given that the global UAS market is expected to more than double in size by 2025, we can expect AeroVironment’s product line to continue generating blockbuster sales over the next few years. 

AVAV Chart

The firm is nearly debt-free, and investors are starting to take notice of its favorable position — it’s rapidly approaching its all-time high from 2018.

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The Wealth Daily Research Team

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