Top industrial sector stocks this month include Circor International Inc., Sterling Infrastructure Inc., and Bombardier Inc., the share prices of which have all doubled in the past year.
Industrial stocks, represented by the Industrial Select Sector SPDR ETF (XLI), have risen 9% in the past 12 months compared with a 6% gain for the Russell 1000.
Here are the top three industrial stocks with the best value, the fastest growth, and the most momentum. All data are as of June 8.
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) | 13.71 | 1.6 | 0.6 |
| Cresud S.A.C.I.F. y A. (CRESY) | 7.04 | 0.4 | 1.1 |
| Navios Maritime Partners LP (NMM) | 21.21 | 0.6 | 1.1 |
Source: YCharts
- ZIM Integrated Shipping Services Ltd.: ZIM Integrated Shipping Services is an Israel-based container transportation and logistics company with operations in more than 90 countries. On May 22, the company released its first-quarter earnings, reporting a net loss of $58 million compared with net income of $1.7 billion in Q1 2022. Total revenue also fell by 63%. ZIM has seen a major decline in demand for shipping services and a 64% drop in year-over-year freight rates. Shares have fallen 84% from their March 2022 highs.
- Cresud S.A.C.I.F. y A.: Cresud produces agricultural commodities such as soybeans, wheat, corn, and sugarcane. The company also maintains a portfolio of investment properties, including urban hotels, shopping malls, and office buildings throughout Argentina. Net income was 17.5 million Argentinian pesos in the first quarter of 2023, compared with a 30 million peso loss in the previous year when the company adjusted the fair value of investment properties down by 75 million pesos.
- Navios Maritime Partners LP: Navios Maritime Partners is a Monaco-based marine shipping company that ships dry and liquid bulk cargo, petroleum products, and other commodities.
Fastest Growing Industrial Stocks
These are the top industrial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth.
Both sales and earnings are factors that are critical to the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs), which may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
| Fastest Growing Industrial Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Nikola Corp. (NKLA) | 0.61 | 0.4 | N/A (See company description) | 489 |
| Nordic American Tankers Ltd. (NAT) | 3.64 | 0.8 | N/A (See company description) | 461 |
| EHang Holdings Ltd. (EH) | 11.07 | 0.7 | N/A (See company description) | 256 |
Source: YCharts
- Nikola Corp.: Nikola manufactures battery and hydrogen-powered semi-trucks and energy storage systems. Nikola sold $10 million worth of trucks in the first quarter, nearly quintupling its revenue from the year-ago quarter when it recorded $2 million in service revenue and no truck sales. Note Nikola doesn’t have an EPS growth figure in the table above because the company reported a loss per share in the most recent quarter.
- Nordic American Tankers Ltd.: Nordic American Tankers is a Bermuda-based crude oil shipping company that operates 19 vessels. Note Nordic American Tankers doesn’t have an EPS growth figure in the table above because the company reported a loss per share in the first quarter of 2022.
- EHang Holdings Ltd.: EHang designs and manufactures autonomous aerial vehicles for application in the transportation and logistics industry. Note EHang Holdings doesn’t have an EPS growth figure in the table above because the company reported a loss per share in the most recent quarter.
Industrial Stocks with the Most Momentum
These are the industrial stocks that had the highest total return over the past 12 months.
| Industrial Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| CIRCOR International Inc. (CIR) | 47.73 | 1.0 | 143 |
| Sterling Infrastructure Inc. (STRL) | 53.02 | 1.6 | 113 |
| Bombardier Inc. (BBD.B.TO) | CA$58.94 | CA$5.6 | 98 |
| Russell 1000 Index | N/A | N/A | 3 |
| Industrial Select Sector SPDR ETF (XLI) | N/A | N/A | 6 |
Source: YCharts
- CIRCOR International Inc.: CIRCOR International produces critical flow products for the aerospace, defense, and industrial industries. On June 5, CIRCOR shares surged 51% after the company announced it would be acquired by KKR & Co. Inc. (KKR), a private equity firm, for approximately $1.6 billion.
- Sterling Infrastructure Inc.: Sterling Infrastructure engages in building projects for the transportation industry, warehousing, and home construction. On May 1, Sterling released their first-quarter earnings. Net income grew by 11%, along with a 10% increase in total revenue compared to the first quarter of last year. Revenue at the company’s E-Infrastructure segment, which develops data centers and e-commerce infrastructure, increased by 22% amid high demand for data center services.
- Bombardier Inc.: Bombardier is a Canadian aviation company that produces business aircraft and related components.
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, exposing them to a slowdown in global economic growth. An increasing number of U.S. industrial companies, such as 3M Company (MMM) 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.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above stocks.
Source: https://www.investopedia.com/top-industrial-stocks-june-2023-7511399?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo