The global industrial market demonstrates resilience and expansion, propelled by strategic business approaches and technological advancements. Therefore, investors could consider investing in top industrial stocks Owens Corning (OC), Vontier Corporation (VNT), and Amada Co., Ltd. (AMDLY) for solid year-end gains.
The industrial sector has witnessed significant expansion characterized by heightened productivity, technological advancements, and an upswing in the demand for goods and services.
Moreover, as the interlinked global economy compels businesses to pursue specialized industrial services to navigate international regulations, logistics, and intricate supply chain challenges, the industrial services industry is expanding.
Besides, the expansion of industrial activities and the ongoing growth of manufacturing sectors fuel the demand for industrial services. The global industrial services market size is projected to expand at a CAGR of 5.7% to reach around $51.98 billion by 2032.
In addition, the global industrial machinery & equipment market anticipates substantial growth, driven by diverse sector demands and technological innovations. Surging investments in digital technologies such as AI, machine learning, and robotics have improved the industry’s production capabilities and workforce structures.
Globally, the machinery and equipment market is anticipated to reach a projected output of $6.04 trillion in 2023. It is further expected to expand at a CAGR of 11.3% until 2028.
Furthermore, industry 4.0, also known as the fourth industrial revolution, is significantly boosting the industrial sector by introducing advanced technologies and innovative practices.
On top of it, the integration of industry 4.0 technologies facilitates a more connected and transparent supply chain. This enables real-time tracking of materials, efficient inventory management, and improved collaboration between suppliers and manufacturers. The industry 4.0 market is estimated to grow at a CAGR of 21.9% between 2022 and 2027.
Considering these conducive trends, let’s examine the fundamentals of the three industrial stock picks.
Owens Corning (OC)
OC is a global manufacturer of insulation, roofing, and fiberglass materials, offering products for construction applications. The company serves diverse industries with a focus on insulation, composites, and roofing solutions.
On December 7, OC announced a 15% increase in its fourth-quarter dividend to $0.60 per common share, payable to shareholders on January 19, 2024. Its annual dividend of $2.40 yields 1.63% on prevailing prices.
In the third quarter ended September 30, 2023, OC's net sales stood at $2.48 billion. The company reported adjusted EBITDA and earnings of $644 million and $377 million, up 5.9% and 7.4% from the previous-year quarter, respectively. Also, its adjusted EPS grew 15% year-over-year to $4.15.
OC’s EPS is expected to grow 13.1% year-over-year to $2.82 for the fourth quarter ending December 2023. Its revenue is expected to be $2.24 billion for the same quarter. The company surpassed the EPS estimates in each of the trailing four quarters, which is impressive.
OC’s shares have increased 68.6% over the past year and 72.9% year-to-date to close the last trading session at $147.49.
OC’s POWR Ratings reflect its robust prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
OC has an A grade for Momentum and a B for Growth, Value, and Quality. Within the A-rated Industrial - Building Materials industry, it is ranked #2 of 46 stocks.
In addition to the POWR Ratings stated above, one can access NOW’s additional Stability and Sentiment ratings here.
Vontier Corporation (VNT)
VNT is a global player in mobility technology, providing solutions in environmental compliance, fuel dispensing, vehicle tracking, and automotive diagnostics. Operating in two segments, Mobility Technologies and Diagnostics and Repair Technologies, it serves various industries worldwide.
On October 23, VNT's ANGI Energy Systems announced its preparation to supply its first Hydrogen Refueling Station (HRS) to Trillium, supporting Santa Clarita Transit's transition to zero-emission buses in California. The HRS, designed for hydrogen refueling, aligns with California's commitment to hydrogen mobility, showcasing VNT's dedication to sustainable energy solutions.
During the third quarter, which ended September 29, 2023, VNT reported sales of $765.40 million. The company generated adjusted net earnings and EPS of $113.40 million and $0.73, respectively. Its adjusted free cash flow grew 48.1% from the previous-year quarter to $128.40 million.
As of September 29, 2023, VNT's total liabilities amounted to $3.46 billion, compared to its total liabilities of $3.76 billion as of December 31, 2022.
For the fiscal year 2023, the company estimates its adjusted EPS to be in the range of $2.83 to $2.87, and adjusted free cash flow conversion is projected to be around 90-100%.
Analysts expect VNT’s revenue and EPS to rise 3.5% and 13.6% year-over-year to $791.36 million and $0.76, respectively, for the second quarter ending June 2024. The company surpassed the revenue and EPS estimates in each of the trailing four quarters.
The stock has gained 85.5% over the past year and 77.3% year-to-date to close the last trading session at $34.27.
VNT’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
It has a B grade for Value, Sentiment, and Quality. Within the Industrial - Equipment industry, it is ranked #5 among 90 stocks.
To see VNT’s additional POWR Ratings for Growth, Momentum, and Stability, click here.
Amada Co., Ltd. (AMDLY)
Based in Isehara, Japan, AMDLY is a global leader in manufacturing and maintaining metalworking machinery, offering sheet metal fabrication machines, cutting tools, and precision welding machines for diverse industries worldwide. The company specializes in a comprehensive range of solutions, from laser machines to stamping presses.
On October 4, AMDLY introduced "ALCIS-1008e," a three-dimensional laser system with blue and fiber lasers for flexible cutting, welding, and layered manufacturing. The system offers torch exchange, advanced sensing technology, and supports diverse machining applications, reflecting AMDLY's commitment to innovation and sustainability in manufacturing beyond traditional sheet metal processing.
In the six months ended September 30, 2023, AMDLY generated sales revenue and gross profit of ¥187 billion ($1.30 billion) and ¥83.40 billion ($608.46 million), up 10.4% and 12.7% year-over-year, respectively.
The company reported operating profit and net income of ¥27.20 billion ($189.36 million) and ¥19.70 billion ($137.15 million), up 14.3% and 15.9% from the prior-year quarter, respectively.
Street expects AMDLY’s revenue to grow 106.6% year-over-year to $2.79 billion for the fiscal year ending March 2024. The company surpassed the revenue estimates in each of the trailing four quarters.
AMDLY’s shares increased 17.8% over the past six months to close the last trading session at $40.51.
AMDLY’s POWR Ratings reflect a positive outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
The stock has a B grade for Value, Stability, Sentiment, and Quality. Within the A-rated Industrial - Machinery industry, it is ranked #3 of 78 stocks.
Click here for AMDLY’s additional Growth and Momentum ratings.
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OC shares were trading at $147.14 per share on Thursday afternoon, down $0.35 (-0.24%). Year-to-date, OC has gained 75.87%, versus a 24.74% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Industrial Stocks Fueling Year-End Gains StockNews.com
