When you think of industrial stocks, what comes to mind? For most, it’s the idea of industry and what makes it run successfully. The industrial sector is made up of companies that not only operate but produce machinery, heavy equipment, and construction supplies. There are also other companies that produce raw materials for manufacturing. On the other side of this coin, industrial stocks are also considered companies that provide services that relate to the aforementioned.
In fact, some of the biggest companies in the stock market today are in the industrials sector. Major ETF’s also carry some of their weight in names like Caterpillar, General Electric and others. Industrial companies also cross over into other sectors too. When thinking about how raw materials get to the end-user, travel stocks can also fall into the industrials category. So it isn’t an anomaly to see a company like FedEx in transportation and industrials.
Why Industrial Stocks?
Needless to say, industrials stocks are tightly connected to the economy. Industry is an obvious driver of growth and contributor to a contraction in a slowing economy. This is an important thing to keep in mind especially if you’re looking for industrials stocks to buy. Moreover, depending on your investment goals, many of these stocks will also offer a dividend. Surely price appreciation is the result of shareholder value. But a dividend can give shareholders reasons to hold onto industrial stocks or even buy more during a market downturn.