Medical device stocks were sizzling hot in 2019. The iShares U.S. Medical Devices ETF soared 32%, easily beating the S&P 500's performance. This medical device exchange-traded fund (ETF) also trounced the 18% gain delivered by the Health Care Select Sector SPDR ETF, which includes stocks from across the healthcare sector.

Will 2020 be another great year for medical device stocks? I think so. Here are three top medical device stocks you can buy in January to profit from the booming industry.

Small photos of medical technology with a hospital hallway in the background

Image source: Getty Images.

1. Abbott Labs

Abbott Laboratories (NYSE:ABT) ranks as one of the most attractive blue chip stocks on the market right now, in my view. While Abbott's 20% return in 2019 lagged behind the broader market indexes and many other medical device stocks, I expect 2020 will be a big year for the healthcare giant.

The biggest catalyst for Abbott should be the anticipated FDA clearance for the new version of its popular Freestyle Libre continuous glucose monitoring (CGM) system. This new version of Freestyle Libre supports interoperability with other devices and will include alarms, features that will enable Abbott to compete even more effectively against DexCom's G6 CGM.

But Freestyle Libre isn't the only thing Abbott has going for it. The company markets a wide range of products that generated close to $32 billion in sales last year. Among those were several new products that, along with Freestyle Libre, are important growth drivers for Abbott, including Alinity diagnostic systems and MitraClip mitral regurgitation devices.

Investors should also like Abbott Labs' dividend. The company recently boosted its dividend by 12.5%, marking its 48th consecutive year of dividend increases. Abbott's dividend currently yields close to 1.7%.

2. Intuitive Surgical

Intuitive Surgical (NASDAQ:ISRG) is another big medical device stock that underperformed a bit last year. The robotic surgical systems maker delivered a gain of more than 23%, which isn't too shabby but wasn't quite as good as some medical device stocks. But my view is that Intuitive should remain one of the steadiest winners on the market.

The key reason behind my long-term optimism about Intuitive Surgical is its 21st-century version of the old razor-and-blades business model. Intuitive derives over 70% of its total revenue from recurring sources, primarily replacement instruments and accessories for its da Vinci robotic surgical systems. This recurring revenue continues to grow as the company sells and leases more systems and as customers use robotic surgery for more procedures.

Procedure volumes will almost certainly increase due to two key factors: demographic trends and product innovation. With aging populations in the U.S. and across the world, more surgeries that are ideally suited for robotic assistance will be performed. Intuitive Surgical also continues to launch new products like its Ion robotic system for lung biopsy and da Vinci SP for transoral surgery, which expands the types of procedures for which its technology can be used.

I also expect that robotic surgery will gain more widespread acceptance and adoption with new rivals entering the market. Although increased competition usually isn't great news for a stock, my view is that the moves by Medtronic and others to launch new products will expand the robotic surgery market and benefit Intuitive Surgical over the long run.

3. ShockWave Medical

Unlike Abbott Labs and Intuitive Surgical, ShockWave Medical (NASDAQ:SWAV) handily beat the broader market indexes last year, with the stock skyrocketing 44%. The small medical device company took investors on a roller-coaster ride, however, more than doubling by May, losing all those gains by late September, and then rebounding.

I like ShockWave because I like the potential for its technology. The company uses intravascular lithotripsy (IVL) to break up calcium deposits in patients with atherosclerosis, or hardening of the arteries. It's a simple process and arguably a safer approach than traditional methods used to treat the problem, such as balloons and minimally invasive surgery. And lithotripsy has been used for decades to break up kidney stones made of calcium without harming surrounding tissues.

ShockWave also has a huge potential market. Different types of atherosclerosis that the company is targeting combined represent an annual sales opportunity of more than $6 billion. ShockWave plans to launch new products in 2020 and expand into new international markets this year, both of which represent key catalysts for the stock.

There are a couple of downsides for ShockWave, though. It isn't profitable yet and could have to issue more shares in the future to raise cash (as it did in November 2019), a move that would dilute the value of existing shares. Also, the stock is valued at a steep premium, with shares trading at nearly 36 times trailing-12-month sales. Any bumps in the road will likely cause ShockWave's share price to plunge. Still, my view is that the growth prospects for ShockWave make it a stock for aggressive investors to seriously consider buying.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.