Top Industrial Stocks for 2023

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In a market dominated by flashy technology and healthcare companies, industrial stocks often get overlooked. However, these stocks play a crucial role in providing stability and balance to any well-rounded portfolio. Despite making up only about 8.5% of the S&P 500 index by weight, industrial stocks offer impressive performance and even some generous dividends.

One such stock is A.O. Smith Corp. (AOS), a manufacturer of residential and commercial heat pumps, water heaters, and pool systems. With a strong demand and well-run operations, A.O. Smith reported record earnings per share after a 28% surge in profits. Another standout is Cummins Inc. (CMI), an icon in the truck industry known for its best-in-class diesel engines. Cummins has also expanded into natural gas, electric, and hybrid powertrains, and has consistently increased its dividends for the past 20 years.

Other notable industrial stocks include Eaton Corp. PLC (ETN), FedEx Corp. (FDX), Flowserve Corp. (FLS), The Manitowoc Co. Inc. (MTW), Masco Corp. (MAS), Owens Corning (OC), Parker-Hannifin Corp. (PH), and Watsco Inc. (WSO). Each of these companies brings unique strengths and growth potential to the industrial sector.

10 Best Industrial Stocks to Buy Now

Investors often overlook industrial stocks in favor of more glamorous sectors like technology or healthcare. However, industrial stocks can provide a stable foundation for a well-rounded portfolio. In this article, we will highlight 10 industrial stocks that have shown impressive performance and offer generous dividends.

1. A.O. Smith Corp. (AOS) – A.O. Smith is a leading manufacturer of residential and commercial heat pumps, water heaters, and pool systems. The company reported record earnings per share in July, driven by strong demand and well-run operations.

2. Cummins Inc. (CMI) – Cummins is a renowned manufacturer of diesel engines and has expanded its expertise to natural gas, electric, and hybrid powertrains. Despite disappointing earnings, Cummins has a bright future and has increased its dividend for 20 consecutive years.

3. Eaton Corp. PLC (ETN) – Eaton operates as a power management company, providing electrical components and materials to various industries, including the electric vehicle supply chain. With a projected revenue expansion of over 10% in fiscal 2023, Eaton is poised for continued growth.

4. FedEx Corp. (FDX) – As a major player in the package delivery industry, FedEx has focused on improving efficiencies and driving up profitability. The company is expected to see strong earnings growth next fiscal year, leading to a surge in its stock price.

5. Flowserve Corp. (FLS) – Flowserve is a dominant player in specialty products related to flow controls, seals, and valves. The company’s earnings are forecasted to nearly double in fiscal 2023, and it has a strong growth outlook for fiscal year 2024.

6. The Manitowoc Co. Inc. (MTW) – Manitowoc provides engineered lifting solutions, including hydraulic cranes used in construction and industrial sectors. Despite not currently paying dividends, the company has seen a significant increase in its share price and has a strong outlook for the construction industry.

7. Masco Corp. (MAS) – Masco is a leading provider of plumbing fixtures, including faucets and shower heads. The strength of the housing market has driven consistent demand for Masco’s products.

8. Owens Corning (OC) – Owens-Corning is a building materials giant that specializes in insulation, roofing, and other products. Despite concerns about higher interest rates, the company has benefited from strong construction demand.

9. Parker-Hannifin Corp. (PH) – Parker-Hannifin manufactures motion and control technologies used in various industries. The company recently reported record sales and margins and continues to plot a path to consistent growth.

10. Watsco Inc. (WSO) – Watsco is an industrial distributor focused on HVAC equipment, refrigeration solutions, and plumbing products. The company has experienced strong growth due to a better-than-expected environment for the U.S. economy and the housing industry.

These 10 industrial stocks represent a diverse range of companies with impressive performance and potential for future growth. Investing in these stocks can provide stability and potential dividends in a well-rounded portfolio.

Short Takeaways: Industrial stocks may not have the flash of technology or healthcare companies, but they can provide stability and dividends in a portfolio. A.O. Smith, Cummins, Eaton, FedEx, Flowserve, Manitowoc, Masco, Owens Corning, Parker-Hannifin, and Watsco are all industrial stocks worth considering for their impressive performance and potential for growth. These companies operate in various sectors, including manufacturing, construction, and power management, offering investors a diverse range of opportunities.

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