The medical devices industry is rebounding from its pandemic-led decline in demand with the rescheduling of elective surgeries and the increasing need for services by an aging population. Continuing innovations and the integration of advanced technologies positions the industry well for growth. Therefore, we think prominent players in this space, Abbott (ABT) and Abiomed (NASDAQ:ABMD), should benefit. But which of these stocks is a better buy now? Read more to find out. Abbott Laboratories (NYSE:ABT) in Abbott Park, Ill., and Danvers, Mass.-based Abiomed, Inc. (ABMD) are two prominent players in the medical devices industry. ABT discovers, develops, and sells health care products focused on cardiovascular, diabetes care, diagnostics, neuromodulation, nutrition, and medicine. The company operates through four segments--Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices. ABMD, in comparison, manufactures and markets medical devices and technologies that provide circulatory support and oxygenation. It also provides a continuum of care to heart failure patients. Both companies sell their products through direct sales and clinical support personnel worldwide.
As the categorization of medical procedures into essential and non-essential led to a decline in non-COVID-19 related medical procedures last year, the medical devices industry suffered a significant setback. However, solid progress on the vaccination front caused a rebound in demand for medical devices this year, primarily for rescheduled surgeries. Moreover, continued product innovations, the integration of artificial intelligence (AI), and entry into new market divisions position the industry well for solid long-term growth. The global medical devices market is expected to grow at a 5.2% CAGR to $671.49 billion by 2027. So, both ABT and ABMD are expected to benefit.
But while ABT gained 7.3% in price year-to-date, ABMD has surged 8.3%. ABMD is also a clear winner with 22.5% gains versus ABT’s 9.5% returns in terms of the past year's performance. But which of these stocks is a better pick now? Let’s find out.