Often Overlooked – Industrials Stocks
(Last Updated On: 25. January 2023)
The industrials sector is often overlooked by investors because it is rarely in the spotlight and in the headlines. But actually, it is incredibly diverse. You can find there mechanical engineering companies. But also logistics service providers, maintenance companies, arms companies, but also suppliers for other industries, such as construction companies. I will show you 5 companies from the industrials sector as a brief overview so that you can then take a closer look at them if you are convinced at first blush.
Finviz.com lists around 650 companies from the industrials sector. Among them, 279 are paying a dividend, and 117 of them are in the current Dividend Radar table of dividend growers. I’ll present you now my five industrial stocks favorites in terms of growth and dividends for the still young year 2023. But before you continue reading, please note my disclaimer:
Disclaimer: I am NOT a financial advisor. I’m using information sources believed to be reliable, but their accuracy cannot be guaranteed. The information I publish is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. You are advised to discuss your investment options with your financial advisers, whether any investment is suitable for your specific needs. I may, from time to time, have positions in the securities covered in the articles on this website.
Triton International Limited
The first stock in is the world leader in leasing shipping containers
- This company is projected to increase its earnings per share by 9.91 percent per year over the next few years
- The dividend has been growing for six years, because that’s how long the company has existed in its current form. At that time it was merged from two large container companies that were already global market leaders
- The dividend growth rate averages 6.11 percent per year
- With a P/E of 6.25, the share is undervalued and currently promises a potential return of 37% by the end of 2024
Cummins is a global developer and manufacturer of heavy-duty turbines, engines, transmissions, complete powertrains for diesel, gasoline, electric, gas and hydrogen-powered units of all sizes from passenger cars to power plants.
- The company is expected to increase its profits by 11.52% annually over the coming years
- The dividend itself has been increased continuously for 17 years at a rate of 19.26% annually
- The P/E of 14.18 is slightly below the average of 14.69
- The return potential by the end of 2025 at 11.1%
The industrial conglomerate 3M is a well-known one. The company has been suffering from massive class action lawsuits for several years. But there is now an end in sight. There have also been slight dents in growth in recent years. But here, too, restructuring is in progress.
- Of course, earnings growth has slowed in recent years. But with a P/E of 10.51 and a dividend yield of almost 5%, the stock is a hot buy
- There are 64 years of dividend growth in the books and I think that this will continue
- On average, the dividend has been increased by 7.8% in the past
- Overall there is a 13.4% return potential by the end of 2025
MSC Industrial Direct
MSC Industrial Direct is probably less known because its really not sexy at all. But if you have read Peter Lynch’s Book “One Up On Wall Street“*, you will know that the unsexiest companies can belong to one of the most profitable ones. It is a direct sales and service provider for the metalworking industry. Around 1.9 million different products are offered there. I would say you can buy everything from bits for screwdrivers to complete machines. Most of these can be delivered within 24 hours.
- The company often pays special dividends. That’s why it often falls through the classic screeners
- MSC has increased the regular dividend by 10.8% annually for 18 years in a row
- With a price-earnings ratio of 12.48 and an average price-earnings ratio of 17.4, the stock is clearly undervalued
- It promises a return potential of 9.5% by the end of 2025
The last one is also a supplier of tools and complete tool systems. You can get everything there, from screwdrivers to workshop equipment for car dealerships, for vehicle fleets, for example for mining operations of the military.
- Snap On is a franchise that has consistently increased its dividend for the past 13 years, averaging 11.76% annually
- The potential return here is 8.1 percent by the end of 2025
- The preferred dividend yield of 3% should be available at prices below $216. So here you have to wait patiently to get invested
Of course, there are many other industrials stocks that deserve a closer look which I also have on the watch list. Such as the logistics companies Fedex and UPS. But also construction machinery manufacturers such as Caterpillar or Stanley Black and Decker also belong in the industrial sector.
In any case, it is worth examining the sector for purchase candidates and to wait for favorable valuations.
Because many of the companies presented here are also cyclical, which of course are sometimes more expensive and sometimes cheaper, depending on the economy. So, have fun looking for worthwhile investments in the industrial sector!
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