The industrial sector is a vital component of the United States economy, and one that often goes relatively unnoticed. The sector comprises businesses engaged in construction, manufacturing, mining  and other blue collar industries. Stocks in the sector tend to be dependable and steady overall and attend to also pay dividends.

They are logical choices but many times lack attention due to their slow growth relative to the technology sector, for example. As the economy strengthens in early 2024 industrial stocks are again worth considering. Let’s take a look at three equities within the sector that offer a particularly strong mix of factors for investors.

3M (MMM)

3M (NYSE:MMM) continues to suffer following its most recent earnings report.  that negative sentiment has sent its shares lower creating a contrarian opportunity. It’s a continuation of a pattern in which investors shy away from the industrial giant.

In other words, it’s a contrarian opportunity. 

The apparent reason for the decline following earnings has to do with guidance. 3M leadership’s leadership is projecting earnings per share of $9.55 for 2024. However, Wall Street had been expecting $9.90. Pundits are quick to note that 3M’s guidance has historically been very conservative. Thus, it is entirely possible that EPS will meet or exceed what Wall Street is hoping to find.

There’s also a lingering issue surrounding 3M which has been subject to serious issues of late. 3M continues to deal with legal issues and has, to date, paid out $15 billion in settlements. The company’s earnings aren’t in jeopardy due to further settlements. There is a very good chance that 3M dividends will go unscathed  following this whole fiasco. That means there’s a good chance that contrarian investors receive a nice deal by investing today.

Caterpillar (CAT)

Caterpillar (NYSE:CAT) stock continues to rebound as investors look for signs of continued strength ahead. The third quarter was not a strong one for Caterpillar. Following its last earnings report, shares declined by more than 15%.

Things are looking up in anticipation of Caterpillar’s fourth quarter earnings report due out Feb. 5. Currently, that optimism  is a result of United Rentals’ (NYSE:URI) connection to Caterpillar and its strong results.

United Rentals business is highly dependent on construction equipment and the company deals with caterpillar often. United Rentals recently released a strong 2024 forecast which implies strong business for Caterpillar by extension.

Broad macroeconomic factors also appear to benefit optimism around Caterpillar overall. The industrial sector has been relatively muted due to overarching concerns that a recession will appear. However, it appears that a soft landing is the likely outcome. The anticipation of rate cuts later this year suggest that construction activity will see an uptick. This is easily one of the best industrial stocks on the market.

Albemarle (ALB)

It looks pretty clear that Albemarle (NYSE:ALB) stock is either very near its bottom or has passed that price. Shares have dipped into the $110s during November, December, and January. That suggests that investors have an opportunity now and that a bottom is likely in that range.

Investors remain well aware of the fact that the lithium and electric vehicle industries have taken a beating since early in 2023. They are also aware that many of those shares remain heavily discounted and are bargains.

Albemarle is perhaps the most obvious bargain of all. It is the largest lithium producer globally and a vital link in the EV supply chain in the United States. The electric vehicle industry is going through growing pains but is not in any danger of collapse. 

Lithium prices will rebound most likely in late 2024 or sometime in 2025. It is nearly inevitable. Patience and a contrarian point of view will go a long way if an investment in Albemarle is made currently. If you are looking for the best industrial stocks, start here!

On the date of publication, Alex Sirois 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.