Top Industrial Stocks for March 2021

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The industrial sector includes companies that produce machinery, equipment, and supplies that are used in construction and manufacturing, as well as those that provide related services. These companies are closely tied to the economy, and their business volume often falls sharply during recessions, though each industrial subsector often performs differently. Well-known companies include Lockheed Martin Corp. (LMT), Honeywell International Inc. (HON), and 3M Co. (MMM). The industrial sector also includes companies that provide air transportation services such as United Airlines Holdings Inc. (UAL).

Industrial stocks, as represented by the Industrial Select Sector SPDR ETF (XLI), have underperformed the broader market, providing investors with a total return of 11.8% compared to the Russell 1000’s total return of 21.1% over the past 12 months. These market performance numbers and all data below are as of February 23.

Here are the top 3 industrial stocks with the best value, the fastest earnings growth, and the most momentum.

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 you’re paying less for each dollar of profit generated.

Best Value Industrial Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
GrafTech International Ltd. (EAF) 12.57 3.4 7.8
Air Lease Corp. (AL) 46.80 5.3 9.6
Huntington Ingalls Industries Inc. (HII) 186.42 7.5 10.9

Source: YCharts

  • GrafTech International Ltd.: GrafTech manufactures graphite and carbon-based products and offers related services. Among the company’s products are graphite electrodes, petroleum needle coke, and energy solutions for making steel, silicon metal, electronics, aluminum, and automotive products. For Q4 2020, the company reported an 18.5% year-over-year (YOY) decrease in net sales and a 28.5% YOY drop in net income. GrafTech said that lower sales volumes accounted primarily for the decline.
  • Air Lease Corp.: Air Lease is involved in the purchase, sale, and leasing of commercial aircraft worldwide. In Q4 2020, Air Lease reported that it had delivered 10 new aircraft from its order book.
  • Huntington Ingalls Industries Inc.: Huntington Ingalls is a shipbuilding company. It designs, builds, and maintains nuclear and non-nuclear ships for the U.S. Navy and Coast Guard. The company also develops non-nuclear ships, assault ships, and provides various professional services. On February 19, the company announced that its Newport News Shipbuilding division had been awarded a $2.9 billion contract for the refueling and complex overhaul of the USS John C. Stennis (CVN 74), a nuclear-powered aircraft carrier.

Fastest Growing Industrial Stocks

These are the industrial stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.

Fastest Growing Industrial Stocks
  Price ($) Market Cap ($B) EPS Growth (%)
Equifax Inc. (EFX) 171.87 20.9 771.4
Kirby Corp. (KEX) 64.45 3.9 640.0
Amerco Inc. (UHAL) 555.15 10.9 490.5

Source: YCharts

  • Equifax Inc.: Equifax Inc., one of the three major U.S. consumer consumer credit reporting agencies, is a global data, analytics, and technology company. Equifax provides direct marketing and transaction processing services, with clients in financial services, retail, telecommunications, utilities, healthcare, and other sectors. The company announced on February 11 that it had closed the acquisition of Kount, an artificial intelligence-driven fraud prevention and identity protection company. The deal, valued at $640 million, will expand Equifax’s footprint in digital identity and fraud prevention solutions.
  • Kirby Corp.: Kirby mainly operates a fleet of inland tank barges and specializes in the transportation of industrial and agricultural chemicals, as well as oil and petroleum products. For Q4 2020, Kirby reported a 25.3% YOY decline in total revenue as net earnings jumped by more than seven-fold. The company had a net loss of $272.5 million for the year. Kirby said the pandemic’s impact on the economy hurt the company for much of the year.
  • Amerco Inc.: AMERCO is a holding company known primarily for its ownership of U-Haul, which offers rental of trucks, trailers, and storage space. The company also offers property and casualty and life insurance, and related products through several subsidiaries.

Industrial Stocks with the Most Momentum

These are the industrial stocks that had the highest total return over the last 12 months.

Industrial Stocks with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Generac Holdings Inc. (GNRC) 333.04 20.9 186.6
United Rentals Inc. (URI) 306.36 22.1 102.3
Axon Enterprise Inc. (AXON) 169.14 10.8 96.7
Russell 1000 N/A N/A 21.1
Industrial Select Sector SPDR ETF (XLI) N/A N/A 11.8

Source: YCharts

  • Generac Holdings Inc.: Generac Holdings makes automatic, portable, and stationary standby generators for use in commercial, industrial, residential, and telecommunications applications. The company posted a 28.8% YOY increase in record net sales for Q4 2020, as well as 78.7% YOY growth in net income. Generac said that residential product demand was a primary driver of Q4 performance. In its 2021 outlook, the company said it anticipated significant revenue growth due to several factors including growth in the residential, commercial and industrial markets.
  • United Rentals Inc.: United Rentals, through a subsidiary, provides equipment rental services. The company operates locations in the U.S. and Canada and serves industrial and commercial customers, the construction industry, and individuals and homeowners.
  • Axon Enterprise Inc.: Axon Enterprise creates and manufactures security systems for law enforcement, military, and self defense applications. The company serves customers around the world. Net sales increased by 31.6% YOY for Q4 2020. Axon posted net income of $25.8 million for the quarter versus net loss of $12.4 million for the year prior. The company attributed the performance in part to strong demand for its TASER devices and cloud software.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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