Are These The Best Industrial Stocks To Buy This Week?
Investors are often focused on investing in companies that would shape the future, more often than not industrial stocks are overlooked in their importance and potential to grow. Not only industrial companies are bloodlines of a country, industrial companies have a direct relationship with a nation’s economy. As vaccination is underway, investors should expect the top industrial stocks to bounce back as more and more companies are beginning to work at optimum capacity.
When coronavirus was at its peak and visits to physical stores posed a tremendous risk, companies like FedEx (NYSE: FDX) became a critical business that connects customers with their purchased online goods. The business was booming at the company that early buyers of FDX stock in March last year saw a return of over 140%. For investors worried about inflation concerns, industrial stocks are one of your possible best plays in the stock market today. The reason is that the industrial sector is strongly correlated with the economy’s performance. When the economy is growing, so are the industrials. For instance, General Electric (NYSE: GE) and Boeing Co. (NYSE: BA) are good examples of industrial stocks thriving during an economic recovery.
Industry giants are looking forward to changes proposed by the new Biden Administration, with an emphasis on economic policies. With the government looking to invest $1.3 trillion in infrastructure over the next 10 years, it presents a great opportunity for industry companies to secure federal contracts and expansion to fill demands. Hence, if you expect industrial stocks to receive a shot in the arm in 2021, then now probably is the time to be putting up a list of top industrial stocks to watch right now.
Top Industry Stocks to Buy [Or Sell] Now
- Kansas City Southern (NYSE: KSU)
- Star Bulk Carriers Corp. (NASDAQ: SBLK)
- Norfolk Southern Corp. (NYSE: NSC)
- Equifax Inc. (NYSE: EFX)
Kansas City Southern
First on the list is Kansas City Southern, a Delaware-registered transportation holding company with railroad investment all across the U.S. The company recently struck a merger agreement with Canadian Pacific Railway Limited (NYSE: CP), where Canadian Pacific agreed to acquire Kansas City Southern in a stock and cash transaction worth $29 billion. The merger will create the first railway network that connects Canada, the United States, and Mexico, expanding market reach for both companies and providing new competitive rail transportation options.
Common shareholders of Kansas City Southern are expected to receive 0.489 of CP stock and $90 in cash per KSU stock held. Such fixed ratio values Kansas City Southern at $275 per share, based on CP stock and KSU stock closing prices on March 19th. News of the merger is a delight among investors as KSU stock closed 11.12% higher at $249.09 on Monday.
The creation of a single line from the merger is also set to reduce shipping truck traffic of U.S. highways. This can reduce emissions and lower investment for the maintenance of country roads and public-funded highways. According to the company’s statement, it is also much greener creating less carbon emission and more fuel-efficient than the trucking counterpart. With the news of the merger set to make railways a primary logistic method, will you be adding KSU stock to your watchlist?
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Star Bulk Carriers Corp
Next on the list is Star Bulk Carriers Corp a global ship manager for sea transportation that connects to ports worldwide. A recent increase in price target from Deutsche Bank from $15 to $18 has garnered interest among investors. Following the price hike, SBLK stock opened higher on Monday morning, climbing 7.88% in its early trading before closing 0.77% lower at the end of the session.
The company also reported a solid financial performance in the fourth quarter of 2020. With the impact of the pandemic, quarterly revenue declined 25% year-over-year to $186.0 million. Nevertheless, net income rose by 18% from a year ago to reach $27.8 million in Q4 2020. More importantly, the company was able to reduce its net debt by $149 million, despite pandemic challenges.
Star Bulk Carrier has definitely put its excess cash to good use. Starting with its acquisition of two high spec Kamsarmax vessels earlier this month, the company acquired another six dry bulk vessels from Eneti Inc. (NYSE: NETI) 2 weeks later. With these developments, will investors consider adding SBLK stock to their portfolio?
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Norfolk Southern Corp.
Another railway transportation company making the list is Norfolk Southern Corp. The company operates on the eastern side of the U.S. covering over 21,000 miles of track. NSC stock opened up to a high of $267.82 before retreating to $260.62 at closing.
Like other rail companies that were affected by last year’s slow movement, Norfolk Southern reported a railway operating revenue of $9.8 billion last year, 13% lower compared to 2019 numbers. The adjusted full-year net income for the company is $2.4 billion with earnings per share at $9.25. On a positive note, the adjusted operating ratio, which measures operating expenses as a percentage of revenue, improved to 64.4% versus its previous record of 64.7% in 2019.
Not only has Norfolk Southern shown resilience despite the COVID-19 impact, but it also stands to benefit when the Biden administration starts injecting funds to improve infrastructure. Investors should look forward to slow and steady progress in tandem with the economic recovery efforts. With NSC stock reaching an all-time high, do you think it can continue its momentum?
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Equifax Inc.
Last on the list is Equifax Inc. (EFX), one of the largest multinational consumer credit reporting agencies in the U.S. Over the past year, EFX stock has appreciated by over 60%. Nevertheless, the stock has taken a breather this year since reaching a peak in mid-December 2020.
Equifax also reported a revenue of $1.12 billion in the fourth quarter of 2020. That represented a 23% increase from the fourth quarter of 2019. Total revenue for the year 2020 was $4.12 billion, an 18% increase from the previous year. The company also achieved a net income of $520.1 million. That was a positive change from a net loss of $384.1 million in 2019.
Despite its strong performance, the company is not resting on its laurels. Earlier this month, it acquired HIREtech, technology-focused human capital management, and employer tax incentive firm. The acquisition allows Equifax to help support the industry with services that help simplify complex, manual HR tasks. The company also announced a new integration with PrimePayⓇ, a payroll service, and human capital management provider. This will help automate the transfer of information for verifications of income and employment. Considering all these, will investors take this opportunity to buy more EFX stock?
