Top industrial sector stocks this month include Ardmore Shipping Corp., CECO Environmental Corp., and Exro Technologies, the prices of which have all doubled in the past year while the broader market has slipped.
The sector includes companies that produce machinery, equipment, and supplies used in construction and manufacturing, as well as companies that provide related services. Major companies include Lockheed Martin Corp. (LMT), Honeywell International Inc. (HON), and 3M Co. (MMM). The industrial sector also includes airlines, such as United Airlines Holdings Inc.
Industrial stocks, represented by the Industrial Select Sector SPDR ETF (XLI), have fallen 2% compared with the 9% decline in the Russell 1000’s during the past 12 months.
Here are the top three industrial stocks with the best value, the fastest growth, and the most momentum. All data are as of April 5.
Best Value Industrial Stocks
These are the industrial stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
| Best Value Industrial Stocks | |||
|---|---|---|---|
| Price ($) | Market Capitalization (Market Cap) ($B) | 12-Month Trailing P/E Ratio | |
| ZIM Integrated Shipping Services Ltd. (ZIM) | 23.47 | 2.8 | 0.6 |
| Cresud S.A.C.I.F. y A. (CRESY) | 6.53 | 0.3 | 1.0 |
| A.P. Moller Maersk A/S (AMKBY) | 8.67 | 30.3 | 1.1 |
Source: YCharts
- ZIM Integrated Shipping Services Ltd.: ZIM Integrated Shipping Services is an Israel-based container transportation and logistics company providing cargo for approximately 100 countries worldwide. ZIM’s net income dropped 75% year over year in the fourth quarter of 2022, owing to a 41% drop in the average freight rate. Shares have fallen 80% from their March 2022 highs.
- Cresud S.A.C.I.F. y A.: Cresud produces agricultural commodities such as soybeans, wheat, corn, and sugarcane. The company also maintains a portfolio of investment properties, including urban hotels, shopping malls, and office buildings throughout Argentina. Net income plummeted 74% in the fourth quarter of 2022 as the company contended with lower commodities prices, higher costs, and drought in Argentina.
- A.P. Moller Maersk A/S: Maersk is a Danish shipping company engaged in overseas and inland frieght, as well as related services like warehousing, land and air transport, and supply chain management. It is the world’s largest shipping company by revenue. Like ZIM, Maersk’s profit fell in the final quarter of 2022 on weakening demand and lower freight rates.
Fastest Growing Industrial Stocks
These are the top industrial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are factors that are critical to the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs), which may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
| Fastest Growing Industrial Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Concrete Pumping Holdings Inc. (BBCP) | 6.92 | 0.4 | 1000 | 10 |
| CECO Environmental Corp. (CECO) | 13.66 | 0.5 | 700 | 24 |
| Flowserve Corp. (FLS) | 34.44 | 4.5 | 608 | 13 |
Source: YCharts
- Concrete Pumping Holdings Inc.: Concrete Pumping Holdings provides contractors with concrete finishing and pumping services for residential and commercial customers. The company operates under the brands Brundage-Bone and Camfaud. Through its Eco-Pan brand, the company handles concrete waste disposal. On March 9, the company reported first-quarter 2023 earnings, with net income surging five-fold compared to Q1 2022. Eco-Pan saw a 32% increase in revenue. The company also acquired the assets of Cherokee Pumping Inc. and Cherokee Materials LLC for $6.3 million.
- CECO Environmental Corp.: CECO is a diversified industrial company providing environmental processing equipment for industrial air quality, marine and naval vessels, wastewater treatment, oil and natural gas, and hydrocarbon processing. In 2022, CECO spent $44.9 million on acquisitions, representing 140% of its cash on hand at the end of 2021.
- Flowserve Corp.: Flowserve is a manufacturer of fluid control systems. The company produces custom and pre-configured pump systems, valves, auxiliary systems, and aftermarket parts for general industrial applications. Flowserve’s operating income rose 45% year over year in the last quarter of 2022. The company ended the year with near-record backlog of $2.7 billion.
Industrial Stocks with the Most Momentum
These are the industrial stocks that had the highest total return over the past 12 months.
| Industrial Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Ardmore Shipping Corp. (ASC) | 14.34 | 0.6 | 220 |
| CECO Environmental Corp. (CECO) | 13.66 | 0.5 | 150 |
| Exro Technologies Inc. (EXRO.TO) | CA$2.80 | CA$0.4 | 103 |
| Russell 1000 Index | N/A | N/A | -9 |
| Industrial Select Sector SPDR ETF (XLI) | N/A | N/A | -2 |
Source: YCharts
- Ardmore Shipping Corp.: Ardmore Shipping transports petroleum and chemical products worldwide. The company owns and operates over 20 vessels.
- CECO Environmental Corp.: See company description above.
- Exro Technologies Inc.: Exro is an electric vehicle technology company that develops and commercializes its patented adaptive electric vehicle traction inverter called Coil Driver and advanced energy storage system called Cell Driver. On March 30, the company reported its fourth-quarter earnings results. Net loss for Exro nearly doubled to $12 million compared to Q4 2021, and $2 million in revenue. The company’s payroll and selling, general, and administrative expenses (SG&A) nearly doubled in 2022 from the year before. Note Exro Technologies also has shares that trade OTC in the U.S. under the ticker EXROF.
Advantages of Investing in Industrial Stocks
Established Businesses: Many industrial companies have been in business for decades with a proven track record of successfully navigating the economic cycle through boom-and-bust periods. If an industrial company has generated consistent shareholder returns for decades, there’s a good chance it will continue to do so in the future. For example, aerospace giant Boeing (BA) has weathered many challenges over its 106-year history, but its share price has trended mostly higher since listing on the New York Stock Exchange (NYSE) in 1962.
Infrastructure Spending: The sector stands to benefit from increased national infrastructure spending as the economy recovers from the pandemic. In November 2021, lawmakers passed a $1.2 trillion infrastructure bill, meaning a windfall of sales for industrial companies that provide construction equipment and services, such as Fluor Corporation (FLR), Caterpillar Inc. (CAT), and Jacobs Engineering Group Inc. (J).
Risks of Investing in Industrial Stocks
Global Economy: Many industrial stocks operate internationally, making them exposed to a slowdown in global economic growth. An increasing number of U.S. industrial companies, such as 3M Company and General Motors Company (GM), generate significant revenue from China, making them particularly sensitive to the health of the Chinese economy.
Tariffs: Industrial companies can face challenges from trade tariffs resulting from geopolitical tensions between countries. For instance, many U.S. and Chinese industrials were caught in a tit-for-tat trade war between Washington and Beijing in 2018 when the two economic superpowers disagreed over trade practices. Tariffs imposed by President Trump impacted more than $300 billion worth of imports and raised the price of some goods, like semiconductors and audio/video equipment, by as much as 25%, an increase importers could only partially pass on to consumers.
Source: https://www.investopedia.com/top-industrial-stocks-april-2023-7376177?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo