The medical device sector has shown remarkable resilience and growth potential, extending lucrative opportunities to investors. As we approach 2024, this article explores the best medical device stocks that stand out not just for their innovative products and services but also for their robust financials and strategic market positioning. With the global market size already in the hundreds of billions and anticipated growth, the medical device industry presents a compelling case for investment. It encompasses a wide spectrum of products essential in health care, including diagnostic instruments, therapeutic machines, and life-saving medical technology. We’ve identified five top-tier companies, each with unique strengths and market advantages, ideal for consideration by investors in 2024. These include industry giants as well as innovative disruptors from across the sector.
Abbott Laboratories (ABT): A Diverse Healthcare Giant
Abbott Laboratories is celebrated for its extensive range of medical devices, making it a formidable force in the sector. A key highlight is their breakthrough FreeStyle Libre CGM system, which is a leader in diabetes care technology. The company boasts a stronghold in various medical niches, and its capacity for innovation has consistently driven its market value. Moreover, Abbott’s proven track record of growth and shareholder returns instills confidence among investors. Despite encountering a dip in revenue due to the diminishing demand for COVID-19 tests as the pandemic wanes, Abbott has not faltered. Its ability to maintain a diversified product portfolio has kept its core business robust, making the company resilient to single-market exposure. Investors also laud Abbott for its status as a Dividend King, with an impressive history of dividend increases spanning over half a century, positioning it as a magnet for income investors.As the healthcare landscape evolves with technological advancements and demographic shifts, Abbott Laboratories continues to adapt and advance. Its commitment to research and development has led to a product lineup that addresses some of the most pressing medical needs across the world. For instance, the fusion of its diagnostics expertise with innovative technology has aided in anticipating future health trends, ensuring the company stays at the forefront of the industry. Abbott’s relentless pursuit of new market opportunities, coupled with a proven financial strategy, underscores its potential as a prominent pick for investors in 2024 and beyond.InMode (INMD): Innovator in Aesthetics and Minimally Invasive Technology
InMode, known for its pioneering work in radiofrequency technology, has been turning heads with its minimally invasive solutions within the medical aesthetics sector. Operating out of Israel, this company has carved a niche in a market primed for exponential growth. It has successfully captured the attention of the American market, with demand for its aesthetic solutions spiking, signaling significant global growth potential. As consumer preferences evolve toward non-invasive procedures with minimal downtime, InMode’s offerings are tailored to meet these demands, putting it at the forefront of the industry’s expansion.The company’s growth and success can be attributed to its forward-thinking approach within a sector where innovation is the key to staying competitive. The medical aesthetics market is set to experience a surge, with predictions indicating a doubling in size by the year 2030. InMode’s signature portfolios have been launched to critical acclaim, offering top-of-the-line treatments that resonate with both practitioners and patients alike. The company’s specific focus on energy-based devices positions it as a leader in a growing niche that is tapping into the broader demand for youth-preserving and aesthetic-enhancing solutions. As a result, InMode has not only established a strong market presence but is also poised for impressive growth, making it a prime target for investor consideration in 2024.Intuitive Surgical (ISRG): Revolutionizing Surgery Through Robotics
The surgical landscape has witnessed a revolution with the introduction of robotic systems, chief among them being Intuitive Surgical’s da Vinci systems. These robotic platforms have become staples in operating rooms worldwide, assisting in a variety of complex procedures. The presence of Intuitive Surgical’s systems in hospitals underpins a consistent stream of recurring revenue, as procedures utilizing the da Vinci continue to grow in number. This, coupled with the innovative edge that Intuitive Surgical maintains through continuous technological enhancements, secures its position as a major player in the surgical sector.Intuitive Surgical’s strategy revolves around expanding its install base, thereby increasing its foothold in existing markets while simultaneously breaking ground in new territories. An aging global population bespeaks a future spike in surgical needs, assuring augmented demand for the company’s products and services. Intuitive Surgical’s approach of coupling device sales with a service-and-supply model ensures a steady flow of income from each deployed system, resulting in a business model with high customer stickiness and sustained growth. Their commitment to innovation not only keeps them relevant in an ever-changing market but also reinforces the company’s growth trajectory, making it a compelling investment for 2024.Johnson & Johnson (JNJ): A Behemoth with a Strategy for Growth
Johnson & Johnson, one of the titans of the healthcare industry, boasts an impressive array of medical devices that play pivotal roles in healthcare delivery around the globe. Renowned for its strategic acquisitions and unwavering commitment to innovation, J&J has held a longstanding position of preeminence within the medical device arena. The company’s business model, focused on sustainable growth and broad market reach, has served as a beacon for other entities in the sector aiming to scale and diversify. As it stands, Johnson & Johnson is not only an industry leader but also a venerated name among dividend investors, known for its consistent payout increases.The company’s anticipated spinoff of its consumer health unit into KenVue, an independent entity, is set to redefine J&J’s focus, unlocking potential for heightened profitability and market responsiveness. The maneuver is anticipated to create a leaner, more agile organization ideally positioned to capitalize on emerging market opportunities and streamline investments into high-growth areas. The strategic decision of partitioning the consumer health division can be seen as a move to intensify its core mission of pioneering medical devices, pharmaceuticals, and biotech innovations. Investors looking for an amalgamation of stability, steady growth, and consistent dividends should keep a keen eye on Johnson & Johnson as it marches toward 2024.Outset Medical (OM): Disrupting Dialysis with Cost Efficiency
Outset Medical’s Tablo is shaking up the dialysis market with its innovative design that caters to both clinical and home environments. Outset’s focus on improving patient care while reducing healthcare costs dovetails with the industry’s move toward patient-first services. Tablo’s introduction to the market coincides with a rising demand for home-based dialysis solutions, intensified by policy changes that favor such treatments.Amidst a growing prevalence of chronic kidney disease worldwide, Outset’s device stands out by combining convenience with efficiency, potentially increasing the company’s market share within the vital medical service sector of dialysis. For investors, Outset Medical symbolizes a company poised to unsettle the traditional medical landscape and represents a strong investment prospect.Investors looking for broader sector exposure might consider ETFs like the iShares U.S. Medical Devices ETF (IHI), SPDR S&P Health Care Equipment ETF (XHE), or First Trust Indxx Medical Devices ETF (MDEV). These funds offer diversified portfolios in the med-tech space, balancing risk while participating in the industry’s growth. Nonetheless, investment choices should align with an individual’s risk appetite and market trends. The medical device sector, fueled by constant innovation and a growing demand for health services, offers a dynamic investment landscape heading into 2024.
