Top Industrial Stocks To Watch In The Stock Market Today
Industrial stocks appear to be getting most of the attention in the stock market today. President Joe Biden unveiled a $2 trillion infrastructure package as his administration shifts its focus to bolster a post-pandemic recovery. Don’t be surprised if Wall Street shifts its attention to the best industrial stocks in the market.
“Maintaining America’s place as the world’s premier economy isn’t something that just happens,” says Chase Robertson of Houston-based RIA Robertson Wealth Management. “It requires investment. Most of that investment comes from the private sector, but certain things – particularly roads, bridges, and shared infrastructure – tend to be funded by the government. And the new administration has made it very clear that this is a major priority.“
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’s performance strongly correlates with the economy. When the economy is growing, so are the industrials. For instance, General Electric (NYSE: GE) and Honeywell (NYSE: HON) are good examples of industrial stocks thriving during an economic recovery. Especially so when there’s a hot flush of money coming into the industrial sector. Therefore, industrial stocks could be looking at major tailwinds ahead. With all that in mind, are you putting up a list of top industrial stocks to buy right now?
Best Industrial Stocks To Watch This Week
- Caterpillar Inc. (NYSE: CAT)
- Raytheon Technologies (NYSE: RTX)
- Cleveland-Cliffs Inc. (NYSE: CLF)
- Innovative Industrial Properties (NYSE: IIPR)
First up, one of the industrial stocks making waves lately is Caterpillar Inc. Many investors are betting on the construction, mining equipment, and energy transportation equipment company to make a strong recovery this year. With the “Build Back Better” banner set the stage for the industrial sectors, it is no wonder why investors are so bullish on CAT stock right now. For the uninitiated, “Build Back Better” is part of Biden’s three-part agenda to rescue, recover, and rebuild the country.
With the policy favoring the revival of the American economy, cyclical business like Caterpillar is well-positioned to benefit. The company is well known for its construction equipment, which has a competitive edge in building back the economy. Also, the company’s expansion in the world’s second-largest economy also seems like a strategic move.
After all, China was the only country showing positive growth among the major economies at the peak of the pandemic. With so many tailwinds that seem to be working in favor of the company, it is no wonder CAT stock is one of the top industrial stocks to watch. Cathie Wood seems to share this positive outlook as ARK Invest owns the stock as well. Now, the question here is, does it make sense to chase CAT stock near its all-time high right now?
The coronavirus pandemic is likely to affect air travel for years to come. But that doesn’t mean that there isn’t any growth driver awaiting Raytheon. The bullish case for RTX stock comes as its space and defense business could do well amid favorable spending trends in global defense budgets. Furthermore, the company competes with General Electric on the Airbus A320 NEO. Enough said it’s obvious that GE and RTX will be offering the engines on the workhorses of the aviation industry in the coming decades.
Despite the increasingly fierce competition in engine supply, the geared turbofan model from Raytheon appears to be taking the lead. To give investors a flavor of the growth potential, during the last earnings call, CEO Greg Hayes said Raytheon’s free cash flow (FCF) would “continue to grow over the next several years back to that $8 billion to $9 billion that we had forecast.”
If and when air traffic does get back to the pre-pandemic level, investors are likely to benefit from the long-term growth prospects of Raytheon’s commercial aerospace business. That said, will all these make RTX stock an attractive proposition for long-term investors?
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Cleveland-Cliffs is an industrial company that focuses on the mining, beneficiation, and pelletizing of iron ore. The company has been rather aggressive with its expansion. It has borrowed heavily to grow its business beyond a supplier to steelmakers into the largest flat-rolled steel producer in North America. Last year, the company acquired two major steelmakers, AK Steel and ArcelorMittal USA, vertically integrating its legacy iron ore business with quality-focused steel production. CLF stock rallied more than 160% in the past 6 months.
The recent rally seems to be coming from investors responding to the company’s latest press release. In it, the company provided the date for its first-quarter financials and also provided a positive update on its financial guidance. Cleveland-Cliffs expects to make an EBITDA of approximately $500 million for its first quarter of 2021 and expects a full-year EBITDA of approximately $3.5 billion. 2020 was one of the company’s most transformational years after two major acquisitions. With that in mind, will you consider buying CLF stock?
Innovative Industrial Properties Inc.
Innovative Industrial Properties (IIPR) has become a mega landlord in the rising marijuana industry. The company has been on an acquisition spree. IIPR made a purchase of a cannabis cultivation farm in Illinois worth $6.5 million. The REIT also secured $45 million in financing to fund building for a facility in said site, which will be leased back to 4Front Ventures Corp. Not only will such a facility create a foothold for the REIT company, but it also stands to create jobs and boost the economy in that state.
Innovative Industrial Properties has also recently declared its first-quarter’s dividends in 2021 of $1.32 per share of common stock. Analysts estimate dividend earnings could reach up to $7.30 per share this year with $158 million in revenue. The company may appear expensive on this list. But it is also arguably the one with the most growth potential. Considering the huge potential of the marijuana industry, do you think IIPR stock will be an interesting industrial play?