Intuitive Surgical (ISRG +1.70%) Intuitive Surgical is the leader in robotic surgery equipment. It has more than 9,900 of its million-dollar-plus da Vinci robotic surgery systems installed in 72 countries. Together, they've been used to perform more than 16 million procedures.
What's appealing about the medical device giant is that only about a quarter of its revenue comes from selling its extremely expensive systems. The rest is from servicing and supplies -- and is dependable, recurring revenue.
Image source: Getty Images.
Given Intuitive Surgical's business opportunities, it may not be surprising that its stock is rather richly valued, with a recent forward-looking price-to-earnings (P/E) ratio of 59, above its five-year average of 56. (Both those numbers are quite steep -- but that's largely because the company has been such an impressive growth stock.) Also, shares popped up by 23% last month, on a good earnings report.
NASDAQ: ISRG
Key Data Points
I love Intuitive Surgical as an attractive healthcare stock. But I can't deny that it's not exactly bargain-priced these days. You should only buy into it if you plan to hold for years, if not decades.
So I invite you to check out Medtronic (MDT +1.86%), which is making inroads into robotic surgery -- and has a more inviting valuation. Its recent forward P/E, for example, was just 18, only a smidge above its five-year average of 17.
NYSE: MDT
Key Data Points
Medtronic focuses on its higher-margin operations, shedding its less profitable diabetes division. It's also a solid dividend-paying stock, with a recent dividend yield of 2.8%.
The company reported a solid quarter ending on Oct. 24, the second of its fiscal year 2026. On the earnings call, CEO Geoffrey Martha said:
"[B]ecause of our organization's relentless focus, that acceleration is indeed underway. ... Both our revenue and EPS [earnings per share] beat expectations. Looking across our business, procedure volumes and end markets are robust ... as we launch innovative technologies and execute ahead of plan in some of the most attractive and fast-growing end markets in medtech."
Depending on how much valuation risk you can handle, you might want to dig deeper into either or both of these companies.
