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4 Industrial Manufacturing Stocks to Gain on Robust Industry Trends
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The Zacks Manufacturing – General Industrial industry is poised for growth, driven by increased investments in product development and technological advancements. The industry participants’ efforts to digitalize business operations and expand market presence through strategic acquisitions are also expected to boost the industry’s growth.
However, persistent softness in the manufacturing sector has marred the industry's outlook. Crane Company (CR - Free Report) , Oshkosh Corporation (OSK - Free Report) , Flowserve Corporation (FLS - Free Report) and Helios Technologies, Inc. (HLIO - Free Report) are a few industry participants that are likely to capitalize on the prevalent opportunities.
About the Industry
The Zacks Manufacturing – General Industrial industry comprises companies that produce a wide range of industrial equipment. Some industry players offer power transmission products, bearings, engineered fluid power components and systems, industrial rubber products, vapor-abrasive blasting equipment, vehicle-powered truck refrigeration systems, adhesive, gel coat equipment, flow-control components and linear motion components. Industrial manufacturing companies also reconstruct and assemble pumps, valves, speed reducers and hydraulic motors. The companies provide services to original equipment manufacturing and maintenance, repair and overhaul customers. These end users belong to the mining, oil and gas, forest products, agriculture and food processing, fabricated metals, chemicals and petrochemicals, transportation and utilities industries.
Major Trends Shaping the Future of the Manufacturing General Industrial Industry
Investments in Innovation & Technological Advancements: The industry participants’ constant focus on innovation, product upgrades and the development of new products to stay competitive in the market should drive growth. With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. Digitization enables industry participants to boost their competitiveness through enhanced operational productivity, product quality and better cost management.
Acquisition-Based Growth Strategy: The industry players rely on an acquisition-based growth strategy to broaden their customer base and enhance their product portfolio. This helps them foray into new markets and solidify their competitive position. Exposure to various end markets helps industrial manufacturing companies offset risks associated with a single market.
Weakness in the Manufacturing Sector: Persistent weakness in the manufacturing sector has been denting the demand in the industry. After witnessing expansion in economic activities for the second consecutive month in February, the manufacturing sector contracted for the sixth consecutive month in August. Per the Institute for Supply Management’s (ISM) report, the Manufacturing Purchasing Manager’s Index touched 48.7% in August. A figure less than 50% indicates a contraction in manufacturing activity. Although the New Orders Index expanded in August, touching 51.4%, the metric was in contraction territory for the previous six consecutive months.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Manufacturing – General Industrial industry, housed within the broader Zacks Industrial Products sector, currently carries a Zacks Industry Rank #46. This rank places it in the top 19% of 245 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Given the industry’s bright near-term prospects, we will present a few promising stocks for your portfolio. But before that, it is worth taking a look at the industry’s stock market performance and current valuation.
Industry Lags Sector & the S&P 500
The Zacks Manufacturing – General Industrial industry has underperformed both the broader sector and the Zacks S&P 500 composite index over the past year. Over this period, the industry has grown 6.4% compared with the sector and the S&P 500 Index’s rise of 9.1% and 18.8%, respectively.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month Price-to-Earnings (P/E), which is a commonly used multiple for valuing manufacturing stocks, the industry is currently trading at 21.01X compared with the S&P 500’s 23.24X. However, it is above the sector’s P/E ratio of 19.82X.
In the past five years, the industry has traded as high as 26.22X and as low as 15.87X, with the median being 20.88X, as the chart below shows.
Price-to-Earnings Ratio vs SP500
Price-to-Earnings Ratio vs Sector
4 Manufacturing-General Industrial Stocks Leading the Pack
Oshkosh: Based in Oshkosh, WI, OSK is engaged in offering purpose-built vehicles and equipment, including carriers, wreckers and rotators through direct sales representatives, distributors and dealers. The company stands to gain from the higher demand for Next Generation Delivery Vehicles and international tactical wheeled vehicles. Also, lower new product development costs and increased vehicle production rates bode well for it.
The Zacks Consensus Estimate for this Zacks Rank #1 (Strong Buy) company’s 2025 earnings has been revised upward 6.2% to $10.93 per share in the past 60 days. Its shares have surged 34.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: OSK
Flowserve: Headquartered in Irving, TX, Flowserve is involved in manufacturing precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications. The company is benefiting from strength in the aftermarket business, driven by strong demand for products and services in North America, the Middle East and Africa. Also, increased customer orders in the energy and general industries end markets are expected to bolster FLS’ growth.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s 2025 earnings has been revised upward by 5% to $3.37 per share in the past 60 days. Its shares have gained 20.5% in the past year.
Price and Consensus: FLS
Helios Technologies: This Sarasota, FL-based company supplies engineered motion control and electronic controls technology solutions in the Americas, the Middle East, Africa, Europe and the Asia Pacific. Increase in demand for products across the health and wellness end market is supporting HLIO’s performance. Also, higher demand for quick-release coupling products bodes well for the company.
The consensus estimate for this Zacks Rank #1 company’s 2025 earnings has been revised 34.1% upward over the past 60 days. Shares of HLIO have gained 29.4% in the past year.
Price and Consensus: HLIO
Crane Company: Based in Stamford, CT, Crane Company manufactures and delivers specialized industrial solutions and components through sales representatives and industrial distributors. CR is well-positioned to gain from its original equipment manufacturer (OEM) business, driven by higher commercial aircraft build rates. Solid momentum in the commercial and military aftermarket businesses, driven by continued high utilization of aircraft, is aiding the company’s performance as well.
Shares of this Zacks Rank #2 (Buy) company have gained 19.7% in the past year. The Zacks Consensus Estimate for 2025 earnings has been revised 4% upward over the past 60 days.
Price and Consensus: CR
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4 Industrial Manufacturing Stocks to Gain on Robust Industry Trends
The Zacks Manufacturing – General Industrial industry is poised for growth, driven by increased investments in product development and technological advancements. The industry participants’ efforts to digitalize business operations and expand market presence through strategic acquisitions are also expected to boost the industry’s growth.
However, persistent softness in the manufacturing sector has marred the industry's outlook. Crane Company (CR - Free Report) , Oshkosh Corporation (OSK - Free Report) , Flowserve Corporation (FLS - Free Report) and Helios Technologies, Inc. (HLIO - Free Report) are a few industry participants that are likely to capitalize on the prevalent opportunities.
About the Industry
The Zacks Manufacturing – General Industrial industry comprises companies that produce a wide range of industrial equipment. Some industry players offer power transmission products, bearings, engineered fluid power components and systems, industrial rubber products, vapor-abrasive blasting equipment, vehicle-powered truck refrigeration systems, adhesive, gel coat equipment, flow-control components and linear motion components. Industrial manufacturing companies also reconstruct and assemble pumps, valves, speed reducers and hydraulic motors. The companies provide services to original equipment manufacturing and maintenance, repair and overhaul customers. These end users belong to the mining, oil and gas, forest products, agriculture and food processing, fabricated metals, chemicals and petrochemicals, transportation and utilities industries.
Major Trends Shaping the Future of the Manufacturing General Industrial Industry
Investments in Innovation & Technological Advancements: The industry participants’ constant focus on innovation, product upgrades and the development of new products to stay competitive in the market should drive growth. With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. Digitization enables industry participants to boost their competitiveness through enhanced operational productivity, product quality and better cost management.
Acquisition-Based Growth Strategy: The industry players rely on an acquisition-based growth strategy to broaden their customer base and enhance their product portfolio. This helps them foray into new markets and solidify their competitive position. Exposure to various end markets helps industrial manufacturing companies offset risks associated with a single market.
Weakness in the Manufacturing Sector: Persistent weakness in the manufacturing sector has been denting the demand in the industry. After witnessing expansion in economic activities for the second consecutive month in February, the manufacturing sector contracted for the sixth consecutive month in August. Per the Institute for Supply Management’s (ISM) report, the Manufacturing Purchasing Manager’s Index touched 48.7% in August. A figure less than 50% indicates a contraction in manufacturing activity. Although the New Orders Index expanded in August, touching 51.4%, the metric was in contraction territory for the previous six consecutive months.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Manufacturing – General Industrial industry, housed within the broader Zacks Industrial Products sector, currently carries a Zacks Industry Rank #46. This rank places it in the top 19% of 245 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Given the industry’s bright near-term prospects, we will present a few promising stocks for your portfolio. But before that, it is worth taking a look at the industry’s stock market performance and current valuation.
Industry Lags Sector & the S&P 500
The Zacks Manufacturing – General Industrial industry has underperformed both the broader sector and the Zacks S&P 500 composite index over the past year. Over this period, the industry has grown 6.4% compared with the sector and the S&P 500 Index’s rise of 9.1% and 18.8%, respectively.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month Price-to-Earnings (P/E), which is a commonly used multiple for valuing manufacturing stocks, the industry is currently trading at 21.01X compared with the S&P 500’s 23.24X. However, it is above the sector’s P/E ratio of 19.82X.
In the past five years, the industry has traded as high as 26.22X and as low as 15.87X, with the median being 20.88X, as the chart below shows.
Price-to-Earnings Ratio vs SP500
Price-to-Earnings Ratio vs Sector
4 Manufacturing-General Industrial Stocks Leading the Pack
Oshkosh: Based in Oshkosh, WI, OSK is engaged in offering purpose-built vehicles and equipment, including carriers, wreckers and rotators through direct sales representatives, distributors and dealers. The company stands to gain from the higher demand for Next Generation Delivery Vehicles and international tactical wheeled vehicles. Also, lower new product development costs and increased vehicle production rates bode well for it.
The Zacks Consensus Estimate for this Zacks Rank #1 (Strong Buy) company’s 2025 earnings has been revised upward 6.2% to $10.93 per share in the past 60 days. Its shares have surged 34.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: OSK
Flowserve: Headquartered in Irving, TX, Flowserve is involved in manufacturing precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications. The company is benefiting from strength in the aftermarket business, driven by strong demand for products and services in North America, the Middle East and Africa. Also, increased customer orders in the energy and general industries end markets are expected to bolster FLS’ growth.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s 2025 earnings has been revised upward by 5% to $3.37 per share in the past 60 days. Its shares have gained 20.5% in the past year.
Price and Consensus: FLS
Helios Technologies: This Sarasota, FL-based company supplies engineered motion control and electronic controls technology solutions in the Americas, the Middle East, Africa, Europe and the Asia Pacific. Increase in demand for products across the health and wellness end market is supporting HLIO’s performance. Also, higher demand for quick-release coupling products bodes well for the company.
The consensus estimate for this Zacks Rank #1 company’s 2025 earnings has been revised 34.1% upward over the past 60 days. Shares of HLIO have gained 29.4% in the past year.
Price and Consensus: HLIO
Crane Company: Based in Stamford, CT, Crane Company manufactures and delivers specialized industrial solutions and components through sales representatives and industrial distributors. CR is well-positioned to gain from its original equipment manufacturer (OEM) business, driven by higher commercial aircraft build rates. Solid momentum in the commercial and military aftermarket businesses, driven by continued high utilization of aircraft, is aiding the company’s performance as well.
Shares of this Zacks Rank #2 (Buy) company have gained 19.7% in the past year. The Zacks Consensus Estimate for 2025 earnings has been revised 4% upward over the past 60 days.
Price and Consensus: CR