4 Top Industrial Stocks To Buy In July
The industrial sector is rapidly recovering from the low of the pandemic era with the rapid reopening of the economy. Total industrial production rose 16.3% yoy in May. In addition, on June 24, President Biden announced a $ 579 billion infrastructure package with the bipartisan group of lawmakers aimed at fueling demand for industrial products.
The industrial sector should continue to grow in line with the economic recovery.
With that in mind, we believe stocks of fundamentally solid industrial companies Caterpillar Inc. (CAT), Lockheed Martin Corporation (LMT), Corning Incorporated (GLW) and Generac Holdings Inc. (GNRC) could generate significant returns in the months ahead.
Click here to read our Industry Sector Report for 2021
Caterpillar Inc. (CAT)
CAT manufactures and sells construction and mining machinery, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Based in Peoria, Illinois, the segments of the company are Construction, Extractive Industries, Energy and Transportation, Financial Products, and everything else.
On June 22nd, CAT signed a cooperation agreement with Nouveau Monde to develop, test and manufacture Cat® “Zero Emission Machines”. In view of the increasing importance of sustainability and zero-emission initiatives worldwide, this development should enable the company to generate significant sales in the short term.
CAT revenue and revenue increased 11.8% year over year to $ 11.89 billion for the first quarter ended March 31. Operating profit was $ 1.81 billion, 29.2% more than the same period last year. Earnings per common share increased 39.9% from $ 2.77 a year earlier. Cash and cash equivalents for the period increased 59.2% to $ 11.35 billion from the year-ago quarter.
A consensus revenue estimate of 12 billion The Street expects the company’s earnings per share to increase 66.4% year over year to $ 2.23 in the current quarter. CAT also has an impressive win surprise story; it outperformed consensus EPS estimates for each of the past four quarters. CAT grew by 71.7% last year and 18.2% so far this year.
CAT has an overall rating of B, which is equal to purchase in our proprietary POWR rating system. The POWR ratings are calculated taking 118 different factors into account, with each factor being optimally weighted.
CAT also has a B grade for growth and mood. It ranks 30th out of 84 stocks in the A-rated Industry – Machinery Industry. Click here to view additional CAT ratings for Momentum, Value, Quality, and Stability.
Lockheed Martin Corporation (LMT)
LMT is a Bethesda, Maryland-based security and aerospace company that researches, designs, develops, manufactures and integrates technological systems, products and services worldwide. The company operates in four segments: aerospace, missile and fire control, rotation and mission systems, and space travel.
On June 30th, Switzerland selected LMT’s F-35 Lightning II for future air defense requirements. In early June, LMT announced that it would provide NASA with two spaceships for its Venus discovery mission. This shows the company’s dominance in the market.
On May 26th, LMT worked with General Motors Co. (GM) to develop the next generation of lunar vehicles. This collaboration should enable the two market leaders to expand their capacities to develop a unique vehicle class.
LMT net sales increased 3.9% year over year to $ 16.26 billion for the first fiscal quarter ended March 28. Operating profit increased 2.8% year over year to $ 2.18 billion. LMT’s net income was $ 1.84 billion, up 7% year over year. The company’s earnings per share rose 7.9% year over year to $ 6.56.
The Street expects LMT’s revenue for the current quarter through September 2021 to grow 4.2% year over year to LMT 17.19 billion, also beating EPS consensus estimates for each of the past four quarters.
LMT’s shares are up 5.5% over the past six months, closing yesterday’s trading session at $ 378.35. The share has gained 5.2% since the beginning of the year.
It’s no surprise that LMT has an overall rating of B, which is the same as the purchase on our POWR rating system. LMT also has the grade B for value, stability and quality. LMT ranks 7th among the 62 stocks in the aviation / defense services industry. To find out more about LMT’s component qualities, click here.
Corning Incorporated (GLW)
GLW is one of the world’s leading innovators in materials science and specializes in the manufacture of special glass and ceramics. The company’s segments include display technologies, optical communications, environmental technologies, specialty materials, life sciences, and everything else. GLW is in Corning, NY
On June 3rd, GLW introduced the Corning SMF-28® Contour fiber, which offers 50% faster installation and a wider spectrum. This innovation, with its improved efficiency, should be in high demand from telecommunications operators.
On May 12th, GLW inaugurated its new company, the Gen 10.5 LCD Glass Plant in China, which aims to strengthen its global presence.
GLW net sales increased 37.6% to $ 3.29 billion for the first quarter ended March 31. Operating income rose 514.9% year over year to $ 502 million, while net income improved 724% year-over-year to $ 599 million. The company’s earnings per share rose 518.8% year over year to $ 0.67.
Analysts expect GLW’s revenue to grow 17.4% year over year to $ 3.53 billion in the third quarter of its fiscal year ending September 30, 2021. A consensus EPS estimate of $ 0.57 for the current quarter represents an increase of 32.6% over the same period last year. GLW also outperformed the Street’s EPS estimates for each of the past four quarters. The GLW share gained 59.1% last year and 13.5% since the beginning of the year.
It’s no surprise that GLW has an overall rating of B, which equates to buying it on our proprietary POWR rating system. The stock also has a B rating for growth, stability, momentum and quality. GLW ranks 13th out of 44 industrial and manufacturing stocks. Click here to view additional GLW ratings for value and sentiment.
Generac Holdings Inc. (GNRC)
GNRC is a manufacturer and seller of power generation equipment, energy storage systems and other electricity products for the residential, commercial and industrial markets. The company’s Waukesha, Wisconsin segments include domestic and international.
On June 1, GNRC announced the acquisition of Deep-Sea Electronics Limited, a developer and manufacturer of advanced controls. The acquisition should allow GNRC to strengthen its engineering and control capabilities, thereby accelerating the innovation of its product offering.
GNRC reported record net sales of $ 807.43 million for the first fiscal quarter ended March 31, an increase of 69.7% year over year. Operating profit increased 200.9% year over year to $ 189.12 million, while net profit attributable to GNRC increased 235.1% to $ 148.99 million for the period. The company’s earnings per share rose 242.6% year over year to $ 2.33.
A consensus revenue estimate of $ 936.47 million for the current quarter ending September 30, 2021 indicates a 33.5% improvement over the same period last year. Analysts expect the company’s earnings per share to come in at $ 2.55 for the current quarter, up 22.6% year over year. Additionally, GNRC outperformed the Street’s EPS estimates for each of the past four quarters.
GNRC has grown 80.5% over the year to date. The stock gained 245.2% over the course of the year, closing yesterday’s trading session at $ 415.15.
GNRC has an overall rating of B which equates to purchase in our proprietary rating system. It also has an A rating for momentum, sentiment, and quality, and B for growth. It is ranked 33rd in the industry – machine industry.
In addition to the above, we also rated GNRC for value and stability. Click here to see all GNRC ratings.
CAT shares traded at $ 216.71 per share on Thursday afternoon, down $ 0.92 (-0.42%). Since the beginning of the year, the CAT is up 20.23%, while the benchmark index S&P 500 is up 15.76% over the same period.
About the author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to a career as an investment analyst. After completing her master’s degree in economics, she gained knowledge of equity research and portfolio management at Finlatics. More…