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Ride the Momentum in Industrial Sector With These 4 Stocks

The latest Institute of Supply Management (ISM) data reports that the manufacturing index climbed to 60.8% in September from 58.8% in August, scaling the highest since May 2004. Also, Gross Domestic Product (GDP) of the United States grew at an annualized rate of 3.1% in second-quarter 2017, the strongest growth registered since first-quarter 2015.

Industrial stocks have been in investors' good graces, of late, driven by impressive factors such as increased demand for rebuilding supplies (thanks to two major hurricanes), growth in new orders, rise in export and upbeat job market picture, as well as recovery of the Chinese economic conditions.

Banking on such bullish trends, investing in stocks from the industrial sector might prove beneficial now.

We note that the Industrial Products sector is currently placed at the top 31% out of the 16 Zacks Sectors. This sector has also been outperforming the S&P 500 market in recent times. In three months' time, the sector has recorded around 5.2% growth, well above the S&P 500 index's growth of 3.9%

You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here .

A. O. Smith Corporation AOS produces and markets commercial and residential gas, electrical water heaters, gas tankless, various water treatment products in India, Europe, China, and North America. The company has a Momentum Score A. The stock's projected sales growth for 2017 is 11%, higher than 4.2% gain estimated for the industry . It promises returns of 22.2% on equity and 18.2% on capital. In the past 90 days, the Zacks Consensus Estimate for the stock inched up 0.5% for 2017. Notably, the company's EPS is projected to grow nearly 13.9% in the next three to five years.

The company's shares yielded a return of 22.4%, outperforming 14.5% growth registered by the sector, in six months' time.

Xylem Inc. XYL offers state-of-the-art engineered solutions for the wastewater and water applications. The company has a Momentum Score B. The stock's projected sales growth for 2017 is 24%, higher than 2.6% gain estimated for the industry. It promises returns of 17.3% on equity and 9.4% on capital. The Zacks Consensus Estimate for the stock moved 2.6% upward for the current year, in the last three months. Notably, the company's EPS is projected to grow nearly 15% in the next three to five years.

In the past six months, the company's shares yielded a return of 31.6%, outperforming 14.5% growth recorded by the sector.

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It's a once-in-a-generation opportunity to invest in pure genius.

Illinois Tool Works Inc. ITW produces and markets industrial equipment and products across the globe. The company has a Momentum Score B. The stock's projected sales growth for 2017 is 4%, higher than 2.6% gain estimated for the industry. It promises returns of 46.6% on equity and 18.4% on capital. Over the last 90 days, the Zacks Consensus Estimate for the stock moved 1.9% north for 2017. Notably, the company's EPS is projected to grow nearly 9% in the next three to five years.

Over the last six months, the company's shares yielded a return of 16.3%, outperforming 14.5% growth registered by the sector.

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Smith (A.O.) Corporation (AOS): Free Stock Analysis Report

Illinois Tool Works Inc. (ITW): Free Stock Analysis Report

Altra Industrial Motion Corp. (AIMC): Free Stock Analysis Report

Xylem Inc. (XYL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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