Do you want to diversify your portfolio to the next level?
Investing in industrials stocks can offer exposure to a diverse set of innovative businesses that have the potential to grow and generate long term profits. Industrials are a vital part of the economy, providing goods and services that support various companies and consumers. They encompass a wide range of firms, including manufacturing, transportation, energy, aerospace, engineering, and construction.
However, investors need to be selective when choosing the best performers. Let’s review three industrials stocks to consider adding to your portfolio in September 2023.
Honeywell International Inc. (HON)
Founded in 1906, Honeywell (NASDAQ:HON) is a diversified industrials conglomerate. Their customers include end-markets such as aerospace, building technologies, performance materials, and safety and productivity solutions.
Honeywell has been growing its revenue and earnings consistently, driven by a mix of strong organic growth, strategic acquisitions, and operational efficiency. In this year’s Q1 earnings report, the company was able to beat Wall Street’s estimates, with strong growth in its performance materials and aerospace segments. Honeywell was also confident enough to raise EPS guidance for the year.
Similarly, Q2 results came in beyond estimates leading the company to again increase full year revenue, margin, and EPS guidance. In addition to industrials products and solutions, Honeywell has also worked on developing quantum computing technologies. These could definitely pivot the company into novel, lucrative business territories.
Honeywell shareholders have reason to be hopeful as both secular trends and innovative triumphs could lead shares to new heights.
China Railway Construction Corporation Limited (CRCCY)
China Railway Construction Corporation (OTCPK:CRCCY) is one of the largest construction companies in China and the world.
CRCCY has been instrumental in various projects related to infrastructure construction vital to economic development. Those ventures include railways, highways, bridges, tunnels, urban rail transit, water conservancy, airports, ports, and buildings.
Recently, China has received a lot of negative attention in the Western press due to the ongoing property slump. However, a new government stimulus could help to abate further economic calamity. China’s government announced an array of tax cuts for households and businesses. They’ve also lifted certain restrictions on bank lending, which could spur activity in the industrials and construction sectors.
Also, CRCCY has secured several large-scale contracts in overseas markets, such as the high-speed railway project in Indonesia and a light rail project in Saudi Arabia. Despite a slowdown in China’s economy, CRCCY was able to report higher domestic contract values for the first half of 2023. This clearly exemplifies the continued demand in the their key end-markets.
Investors willing to bet on a stock with strong fundamentals, a cheap valuation, and obvious tailwinds guiding growth should definitely give CRCCY an honest consideration.
General Electric Co. (GE)
General Electric (NYSE:GE) is a multinational conglomerate that operates in four segments of power, renewable energy, aviation, and health care.
An iconic, 125-year-old industrials giant, GE has been undergoing a major transformation recently under the leadership of CEO Larry Culp. The company is divesting non-core assets, reducing debt, improving profitability, and focusing on its core businesses.
In 2023, General Electric has been able to exceed Wall Street’s expectations. In the second quarter, GE generated double digit growth in orders and revenues due to strong demand in the their aerospace and renewable energy segments. The industrials giant also increased guidance for the full year. Year to date (YTD), shares have appreciated 34.7%, approaching a six-year high. The stock trades at a cheap valuation of 16.4 times forward EBITDA, only slightly above the five-year average.
GE is certainly a stock for investors who want exposure to an industrials monolith, one that’s undergoing a positive transformation with significant upside potential.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines