Bloomberg’s “Odd Lots” podcast recently discussed with energy investor John Arnold why it’s so difficult to build products in America. The discussion got me thinking about American manufacturing stocks. 

There was a time when almost everything in America was built within America. Then globalization changed all that. Finally, homeshoring has brought some of it back. It’s great to see businesses large and small taking pride in “Made in America” products. 

One area of growth in manufacturing are all the semiconductor chip factories being built in the western U.S. Intel (NASDAQ:INTC) is spending more than $32 billion to build two leading-edge chip factories in Arizona and $28 billion for two in Ohio. 

While I never thought of Arizona as a manufacturing hotbed, Ohio is part of the old Rust Belt, a colloquial term to describe the collapse of manufacturing in the Great Lakes states. In reality, manufacturing is happening in every part of America. Everyone benefits from making items we can use closer to home with a smaller carbon footprint. 

Let’s explore three stocks to buy from companies actually building in America. 

Nucor (NUE)

Nucor (NYSE:NUE) manufactures steel from 26 U.S. steel mills. These mills have the capacity to produce 30 million tons of steel annually. It is the largest steel company in North America. NUE produces one-quarter of all the raw steel in this country using highly efficient Electric Arc Furnaces (EAF). The latter uses approximately 77% recycled content for the steel made in its mills. 

Even though it has more than 10,000 customers, none accounts for more than 5% of its nearly $35 billion in annual revenue. That’s good in the current economic environment. In mid-June, it issued Q2 of fiscal year 2024 earnings guidance. It expects earnings per share of $2.25, down from $5.81 a year ago.   

“The largest driver for the expected decrease in earnings in the second quarter of 2024 as compared to the first quarter of 2024 is the decreased earnings of the steel mills segment, due primarily to lower average selling prices, and, to a lesser extent, lower volumes,” stated its June 14 press release. 

Therefore, its the reason shares are down 11% year-t0-date (YTD). However, over the past five years, they’ve gained 183%, more than double the S&P 500.

Despite the downturn in the steel business, it still generated substantial free cash flow of $4.01 billion in the trailing 12 months ended March 31. And based on an enterprise value of $39.86 billion, that is a free cash flow yield of 10.1%. Anything over 8% is value territory.    

Mueller Industries (MLI)

Mueller Industries (NYSE:MLI) is a much smaller company than Nucor with an enterprise value of $5.17 billion. But as I said in January, it’s a cash-rich stock, and quite simply, one of the best you can own.

The Tennessee-based company manufactures copper products such as copper tube and fittings that are used in end markets like building construction, industrial manufacturing and transportation/equipment construction.   

As the company’s latest presentation states, “Mueller manufactures products necessary in everyday life.”

With 75% of its sales in the U.S., America depends on it. While it has factories elsewhere, it has 19 manufacturing facilities in the U.S. out of 25 worldwide. That doesn’t include the 17 facilities in the U.S. with both manufacturing and distribution. 

With only one analyst covering its stock, there is plenty of time for this excellent growth story to play out. With copper prices lower, its shares have taken a breather in recent weeks. That gives you an opportunity to jump on the bandwagon. There’s plenty of room.  

Thor Industries (THO)  

Thor Industries (NYSE:THO) is the smallest of three firms with a market cap of $4.95 billion. Based in Elkhart, Indiana, it makes lots of recreational vehicles (RVs) under the Airstream, Dutchmen, Heartland, Thor Motor Coach, Buccaneer, Burstner and many other brands, making it the world’s largest manufacturer of RVs. 

Thanks to higher interest rates, demand has slowed, knocking its share price down 21% in 2024. However, its shares are up 60% over the past five years. The company owned or leased 25.8 million square feet of manufacturing and office space worldwide. Of that, 18.5 million are in the U.S., much of it in Indiana.

In Q3 of FY2024, it finished the quarter with an RV backlog of $3.6 billion, with over half ($1.94 billion) from its European business. In 2024, it expects revenue of at least $9.8 billion with earnings per share of $4.50.  

I wouldn’t say its stock is cheap right now. However, with double-digit revenue and net income growth over the past three years, once interest rates fall, this growth will come rushing back. Remember, the RV business is like the cruise industry on wheels.  

On the date of publication, Will Ashworth 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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.