As the population of our country continues to age, treatments and disease detection will continue to increase in demand. Additionally, improvements in imaging, robotics, and AI technology continue to give scientists new tools to make better medical devices. As devices become better and better at diagnosing and treating diseases without needing an in-person doctor, they will continue to build market share. This will be good news for the medical device stocks of companies treating and detecting diseases.

Medical devices are regulated by the FDA much like drugs are. That means an investor should be aware of the workings of the FDA as they approve or disapprove certain devices. And while FDA disapproval can sting a company’s stock, a good medical device stock won’t have all its eggs in one basket. Plenty of rewards exist for a patient investor willing to push through bad news or wait in anticipation of good news.

On top of this, the medical device industry is less sensitive to economic downturns. If economic headwinds persist, medical device stocks could benefit from a flight to safety. So if you believe a recession is around the corner, now is the best time to buy.

Overall, medical device stocks couple high growth potential for strong regular returns. Here are three medical device stocks any investor will want to look out for.

Medical Device Stocks: Intuitive Surgical (ISRG)

Intuitive Surgical (NASDAQ:ISRG) makes robotic surgery equipment, the flagship of which is the da Vinci Surgical System. Robotic surgery promises to deliver better surgical outcomes with greater regularity than what a doctor can do on their own.

Not only that, Intuitive Surgical is using AI/ML to improve patient outcomes. By training a machine to find and approach surgical markers like a doctor would, much of the stress can be removed from the doctor’s load. The synthesis of AI learning and doctors’ insight can be leveraged to provide the best possible care at the lowest possible price.

Intuitive has historically been a strong growth stock, and its price reflects this. Its current price-to-earnings ratio of 70x is likely due to its historically high growth rate and expected future growth. While some investors may balk at such a price, there is reason to be optimistic.

In Q4 2022, the year-on-year use of da Vinci grew by 18%. And while year-on-year revenue increased just 7% overall, this was in part due to the impacts of COVID in China. With China now opened back up, the company could benefit from a return to double-digit growth to justify its high P/E. Investors should look to Intuitive’s earnings on April 14th to see if this is true.

Overall, Intuitive is one of the best-positioned stocks to take advantage of the ongoing robotics and artificial intelligence revolution. And that gives it a pathway to big growth in the very near future.

Medtronic (MDT)

Medtronic (NYSE:MDT) is a giant in the medical device sector, with Q1 2023 sales of $7.7 billion and a net income of $1.2 billion. Its strong dividend of 3.4% is also noteworthy for a medical device company, making it an attractive stock for investors seeking both growth and income.

Medtronic’s line of products and services covers almost the entire spectrum of medical devices. Moreover, Medtronic is venturing into a potentially lucrative market with the launch of Mozarc Medical. Mozarc Medical is a Medtronic-DaVita (NYSE:DVA) joint venture which will develop at-home kidney treatments. With 15% of U.S. adults having chronic kidney disease, this market represents a significant opportunity for Medtronic.

Although Medtronic received a warning letter from the U.S. FDA about its diabetes devices, the company is addressing these issues. Meanwhile, it could be suggested that the FDA letter proves Medtronic’s size is a hindrance. Competing with smaller, nimbler companies may be too big and slow.

But Medtronic is addressing these issues, spinning out its patient monitoring and respiration business. And it could also spin out its diabetes business in the future, allowing it to focus on stronger growth opportunities. And if Medtronic can remove the deadweight, it can quickly create growth opportunities.

Overall, Medtronic is strongly positioned financially for the road ahead. It also has a large number of ongoing clinical trials for its devices. And while some of those trials may fail, a large company like Medtronic can play the averages and ensure that its winners go on to be industry leaders. And that means big returns for investors.

Varex Imaging (VREX)

Varex Imaging (NASDAQ: VREX) is a company that specializes in the design and manufacture of X-ray imaging components. Its X-rays power various applications, including medical imaging, industrial inspection, and security scanning. The company was spun out from Varian Medical (NYSE:VAR) in 2017. And since then, it has established itself as a leading player in the imaging components market.

Varex’s strongest sector is medical imaging. As the demand for disease detection and screening increases, this will likely drive growth in its medical imaging market.

But Varex also has a strong revenue stream in other areas. Varex serves both original equipment manufacturers (OEMs) and end-users in the medical and industrial sectors. This provides a broad customer base for weathering fluctuations in demand from any one industry. So while it has room to grow in the medical device field, it also has plenty of room to grow elsewhere.

In Q4 2022, Varex Imaging’s revenue was $205 million, with a gross margin of 31%. Their net income of just $3.2 million comes largely from their continued heavy investment in research and development. But that is also a point in their favor, as it means they continue building out for the future.

Varex Imaging is a company with strong growth potential in a growing market. And that makes it a medical device stock that should definitely be on your radar.

On the date of publication, John Blankenhorn did not hold (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.