Are These The Top Industrial Stocks To Buy Now?
As the stock market continues to show volatility, investors could be behaving more defensively before making any moves. They could be looking ahead to more data this week on inflation and earnings to have a better gauge of the state of affairs. Now, industrial stocks may not be a natural top pick during times of economic uncertainty. That said, there are plenty of reasons to look at the top names in the industry right now.
For starters, Lockheed Martin (NYSE: LMT) recently said that it will double the production of Javelin anti-tank missiles. This is a key weapon used by Ukraine to defend against the Russian invasion. As it stands, the company is producing 2,100 missiles a year. It is also noteworthy that President Joe Biden visited the company’s factory in Alabama last week. There is now a push for Congress to approve a $33 billion military and humanitarian aid for Ukraine.
Additionally, many of the top industrial stocks also provide decent dividend yields. Last Thursday, UPS (NYSE: UPS) announced a regular quarterly dividend of $1.52 per share. On the record, the company has either maintained or increased its dividend each year since its inception into the stock market in 1999. All in all, the potential of industrial stocks should not be underestimated. With that said, here are some of the top industrial stocks in the stock market today worth noting.
Industrial Stocks To Watch This Week
- Honeywell International Inc (NASDAQ: HON)
- Raytheon Technologies Corp (NYSE: RTX)
- Caterpillar Inc. (NYSE: CAT)
First, let us look at the software-industrial company, Honeywell. In detail, the company operates through four segments, Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. With a track record of more than a century in providing innovation to the world, Honeywell is a company that contributes significantly to the technology and infrastructure that we see today. That said, HON stock has been trading sideways for most parts of the year.
Well, the company started its fiscal year 2022 with a bang. Despite a challenging operating environment right now, Honeywell recently announced its first-quarter financials that met or exceeded its guidance. The company reported sales of $8.4 billion, placing it at the high end of its previous guidance. Furthermore, its earnings per share were $1.64, surpassing the high end of its guidance range. Therefore, Honeywell is now in a favorable position to navigate through all the challenging macroeconomic environments. The company also announced that it will be raising its midpoint of sales guidance and earnings per share outlook by $0.10.
Now, Honeywell will not be where it is today if not for its constant output of innovations. Last week, the company announced its new offerings and enhancements to Honeywell Forge. This is the company’s leading enterprise performance management software solution that aims to assist customers in accelerating the digital transformation of their operations. The new upgrade will help organizations simplify operations and lower costs by increasing the visibility of data while providing real-time insights. Considering these positive developments, would you say that HON stock is a top industrial stock to watch now?
Another top industrial stock to note is Raytheon. The aerospace and defense company provides advanced systems and services to commercial, military, and government customers around the globe. Its Pratt & Whitney segment supplies aircraft engines to aviation customers. Also, it has a Missiles & Defense segment that designs and produces integrated air and missile defense systems. Given the unfortunate turn of events in Ukraine, it should not be surprising that investors may be keeping an eye on RTX stock right now. In fact, the stock is up by about 10% over the past year, amid a volatile market.
After all, the company has been increasing its investments in its Missiles & Defense segment. Last month, the company completed a Series A investment in Firehawk Aerospace, a company that specializes in high-performance propulsion technology. Raytheon aims to integrate Firehawk’s advanced propulsion technology into its future missile systems. Hence, opening up new possibilities for defense solutions that could perform better against advanced threats.
Besides that, its Pratt & Whitney segment also recently announced that Qantas Airways has confirmed that it will be using the Pratt & Whitney GTF™ engines to power 40 Airbus A220 and A320 neo family aircraft. This will include the A321XLR which will operate on domestic and short-haul international flights. Safe to say, this is a testament to the company’s ability to deliver unmatched engine technology that offers economic and environmental advantages. All things considered, would you consider adding RTX stock to your portfolio?
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Lastly, we have Caterpillar to sum up the list. For those unaware, this is a leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Whether it is hospitals, schools, roads, or bridges, many companies around the world leverage Caterpillar’s products to enable higher standards of living. However, CAT stock has been relatively flat since the start of the year.
With that being said, there are several encouraging signs for the company moving forward. Despite the ongoing supply chain challenges that are affecting multiple industries, Caterpillar was able to deliver a satisfactory first-quarter earnings report. Its total sales and revenue for the quarter were $13.6 billion, up 14% year-over-year. This is largely driven by higher sales volume and increasing demand from end-users. Also, its strong balance sheet allowed the company to repurchase shares and pay dividends that totaled $1.4 billion in the quarter.
On top of that, Caterpillar also recently announced the acquisition of Tangent Energy Solutions. Headquartered in Pennsylvania, this is a company that provides customers with turnkey solutions to reduce energy costs and emissions, increase energy efficiency and provide resiliency for customer operations. Looking at the larger picture, these solutions will go hand in hand with Caterpillar’s broad portfolio of electric power products. Overall, it would be sensible to suggest that the company’s long-term strategies for growth are still intact. With that in mind, would you bank on the future of CAT stock at its current valuation?