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It has been an impressive year for the U.S. manufacturing sector so far, despite continued inflationary pressures and geopolitical tensions. Manufacturing activity has been making a steady rebound, thanks to robust demand for factory-produced goods.
The sector has now witnessed growth for seven straight months and is poised to perform well in the near term.
Given the positive sentiment, it would be ideal to invest in five stocks from the manufacturing sector — Applied Industrial Technologies, Inc. (AIT - Free Report) , Dover Corporation (DOV - Free Report) , Hubbell Incorporated (HUBB - Free Report) , RBC Bearings Incorporated (RBC - Free Report) and Trimble Inc. (TRMB - Free Report) — that we have detailed below.
Manufacturing Activity Accelerates
The ISM Manufacturing PMI jumped to 55.6 in July, increasing 2.3% from June’s reading of 53.3 and surpassing analysts’ expectations of a rise to 54. July’s reading was also the highest level since May 2022, when the index hit 55.9.
This is also the seventh straight month of growth for the manufacturing sector after 10 months of contraction. Any reading above 50 suggests an expansion.
Much of the manufacturing activity was driven by a solid jump in production. The production index rose to 58.5 in July, up 6.3% from the prior month and its highest level since November 2021.
Employment also rose in the manufacturing sector, as the employment index surpassed the 50 mark for the first time after 33 months of contraction. The new orders index rose to 56.7 from 56 in the prior month, climbing for the seventh consecutive month.
President Donald Trump’s tariffs have already been creating pressure on several sectors. Also, the manufacturing sector has been feeling price pressures owing to a rise in the costs of aluminum, steel and energy products linked to the ongoing conflict in the Middle East.
However, oil prices have eased over the past few weeks, and higher demand for manufactured goods has been helping the sector. The Federal Reserve also left interest rates unchanged, which, for the time being, is likely to go in favor of the manufacturing sector.
5 Industrial Products Stocks With Upside
Applied Industrial Technologies
Applied Industrial Technologies, Inc. is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies. AIT’s products are mainly sold to original equipment manufacturers, and maintenance, repair and operations customers in Australia, North America, Singapore and New Zealand.
Applied Industrial Technologies’ expected earnings growth for the current year is 5.8%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. AIT currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover Corporation
Dover Corporation is an industrial conglomerate producing a wide range of specialized industrial products and manufacturing equipment.
Dover Corporation’s expected earnings growth for the current year is 10.8%. The Zacks Consensus Estimate for next year's earnings has improved 0.4% over the past 60 days. Currently, DOV has a Zacks Rank #2.
Hubbell Incorporated
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB’s products include plugs, receptacles, connectors, lighting fixtures, high-voltage test and measurement equipment, and voice and data signal processing components.
Hubbell Incorporated’s expected earnings growth for the current year is 12.1%. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the past 60 days. HUBB currently carries a Zacks Rank #2.
RBC Bearings Incorporated
RBC Bearings Incorporated manufactures and distributes engineered bearings and precision components. RBC’s bearings are tools that reduce damage and energy loss, and enable proper power transmission in most machines and mechanical systems.
RBC Bearings’expected earnings growth for the current year is 17%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. RBC has a Zacks Rank #2 at present.
Trimble
Trimble Inc. is a leading technology solutions provider that addresses the needs of building, civil and infrastructure construction, geospatial, survey and mapping, natural resources, utilities, transportation, and government end-markets. Asset owners, general and specialty contractors, engineers and designers, surveyors, energy and utility companies, trucking companies and drivers, as well as state, federal, and municipal governments are TRMB’s primary customers.
Trimble’s expected earnings growth for the current year is 14.1%. The Zacks Consensus Estimate for next-year earnings has improved 0.3% over the past 60 days. TRMB presently has a Zacks Rank #2.
View the Zacks #1 Rank List
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5 Stocks to Grab as Manufacturing Activity Hits Four-Year High
Key Takeaways
It has been an impressive year for the U.S. manufacturing sector so far, despite continued inflationary pressures and geopolitical tensions. Manufacturing activity has been making a steady rebound, thanks to robust demand for factory-produced goods.
The sector has now witnessed growth for seven straight months and is poised to perform well in the near term.
Given the positive sentiment, it would be ideal to invest in five stocks from the manufacturing sector — Applied Industrial Technologies, Inc. (AIT - Free Report) , Dover Corporation (DOV - Free Report) , Hubbell Incorporated (HUBB - Free Report) , RBC Bearings Incorporated (RBC - Free Report) and Trimble Inc. (TRMB - Free Report) — that we have detailed below.
Manufacturing Activity Accelerates
The ISM Manufacturing PMI jumped to 55.6 in July, increasing 2.3% from June’s reading of 53.3 and surpassing analysts’ expectations of a rise to 54. July’s reading was also the highest level since May 2022, when the index hit 55.9.
This is also the seventh straight month of growth for the manufacturing sector after 10 months of contraction. Any reading above 50 suggests an expansion.
Much of the manufacturing activity was driven by a solid jump in production. The production index rose to 58.5 in July, up 6.3% from the prior month and its highest level since November 2021.
Employment also rose in the manufacturing sector, as the employment index surpassed the 50 mark for the first time after 33 months of contraction. The new orders index rose to 56.7 from 56 in the prior month, climbing for the seventh consecutive month.
President Donald Trump’s tariffs have already been creating pressure on several sectors. Also, the manufacturing sector has been feeling price pressures owing to a rise in the costs of aluminum, steel and energy products linked to the ongoing conflict in the Middle East.
However, oil prices have eased over the past few weeks, and higher demand for manufactured goods has been helping the sector. The Federal Reserve also left interest rates unchanged, which, for the time being, is likely to go in favor of the manufacturing sector.
5 Industrial Products Stocks With Upside
Applied Industrial Technologies
Applied Industrial Technologies, Inc. is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies. AIT’s products are mainly sold to original equipment manufacturers, and maintenance, repair and operations customers in Australia, North America, Singapore and New Zealand.
Applied Industrial Technologies’ expected earnings growth for the current year is 5.8%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the past 60 days. AIT currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover Corporation
Dover Corporation is an industrial conglomerate producing a wide range of specialized industrial products and manufacturing equipment.
Dover Corporation’s expected earnings growth for the current year is 10.8%. The Zacks Consensus Estimate for next year's earnings has improved 0.4% over the past 60 days. Currently, DOV has a Zacks Rank #2.
Hubbell Incorporated
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB’s products include plugs, receptacles, connectors, lighting fixtures, high-voltage test and measurement equipment, and voice and data signal processing components.
Hubbell Incorporated’s expected earnings growth for the current year is 12.1%. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the past 60 days. HUBB currently carries a Zacks Rank #2.
RBC Bearings Incorporated
RBC Bearings Incorporated manufactures and distributes engineered bearings and precision components. RBC’s bearings are tools that reduce damage and energy loss, and enable proper power transmission in most machines and mechanical systems.
RBC Bearings’expected earnings growth for the current year is 17%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. RBC has a Zacks Rank #2 at present.
Trimble
Trimble Inc. is a leading technology solutions provider that addresses the needs of building, civil and infrastructure construction, geospatial, survey and mapping, natural resources, utilities, transportation, and government end-markets. Asset owners, general and specialty contractors, engineers and designers, surveyors, energy and utility companies, trucking companies and drivers, as well as state, federal, and municipal governments are TRMB’s primary customers.
Trimble’s expected earnings growth for the current year is 14.1%. The Zacks Consensus Estimate for next-year earnings has improved 0.3% over the past 60 days. TRMB presently has a Zacks Rank #2.