Best industrial stocks to buy in 2022
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Our financial experts have analysed the markets to find the top industrial stocks. Use this page to find out what they are, and get some background on each one.
What are the top industrial stocks to buy?
Here are the top industrial companies around, as chosen by our experts. You can find their latest share price by following the links in the table, or keep reading to learn more about why they were picked.
|#||Stock symbol||Company name||Trade now|
|2||URI||United Rentals Inc.|
|3||GNRC||Generac Holdings Inc.|
|4||MRCY||Mercury Systems Inc.|
|5||GE||General Electric Company|
1. Honeywell International Inc. (NYSE: HON)
Honeywell is an American company that’s heavily involved in a wide range of industries, from aerospace and defence to energy and construction. That means it’s output is extremely diverse, and things from military aircraft to thermostats and smart meters carry the Honeywell brand.
The company was doing well before the coronavirus pandemic, with HON’s share price up 50% in a couple of years beforehand, and has recovered well since. That recovery is what’s helped it take top spot on this list, as it was able to quickly adapt to the pandemic, innovating to reduce the hit from a fall in air travel and demand from the energy sector.
Part of the innovation came from its warehouse automation systems, and that, like smart meters, is a future-proof revenue stream. Meanwhile many of the industries it’s involved in are constantly innovating, so the demand for new products and new technology is always there.
2. United Rentals Inc. (NYSE: URI)
United Rentals is a US-based vehicle rental company that operates across North America. It owns the largest fleet of rental vehicles in the world. It mainly leases out trucks and construction equipment, like work platforms and forklifts.
The last decade has been extremely good for the company, which was added to the benchmark S&P 500 Index in 2014 and has made a series of acquisitions since 2017 to expand. That made it perfectly placed to capitalise on the pandemic construction boom.
A 350% increase in value in a year after the March 2020 market fall is proof of how well United Rentals has been able to take advantage. It has also recently added mobile storage and office space to its resume as well, as it continues to expand to offer more and more rental opportunities.
3. Generac Holdings Inc. (NYSE: GNRC)
Based in the US, Generac manufactures power generators. These can provide backup power for homeowners, or be a portable source of power for commercial or industrial sites.
Although power generation isn’t the most glamourous business, Generac has been able to translate it into a long history of steady share price performance. Since the pandemic, however, it has soared: it climbed more than 250% in a year from April 2020-21.
That’s in part thanks to a convergence of factors, like more demand from construction sites, the unreliability of grid power sources – most notably during the ‘big freeze’ in Texas – and its own growing range of products that offer portable, clean energy. All of these are likely to remain important into the future and are enough to earn Generact third place on our list.
4. Mercury Systems Inc (NASDAQ: MRCY)
Mercury Systems designs and manufactures computer systems for the aerospace and defence industries. Its technology comes in the form of software and hardware that contractors – like the US government – can use to bring cutting-edge technology into their mission control.
Mercury has been on an upward trend since 2013, and it’s done well offering ‘future-proof’ technology to an industry that always wants to be at the very leading edge of it. It has been steadily growing its revenue year-on-year, and every quarter since 2014 has reported some level of growth on the previous year.
Performance like that is extremely promising for the future and is what’s helped Mercury earn a spot on this list. Some recent volatility has made it a bit more of an affordable stock, but it remains one that looks good for the long term.
5. General Electric Company (NYSE: GE)
The General Electric Company traces its origins all the way back to Thomas Edison in the late 19th century. These days, GE is a giant conglomerate that generates and distributes electricity to power all sorts of industries, from regular lighting, to automotive and aviation engines, to medical imaging.
GE is on this list as a longer term investment option. It’s shifting its focus towards new growth areas, like healthcare and renewable energy, to compliment aviation, which currently makes up a big part of its revenue. That aviation sector was hit hard by COVID-19, and it took more than a year for GE to recover back its pre-pandemic stock price as a result.
In the past, GE has scaled highs of $40-50 per share. Although it’s a long way from that now, this transition is part of a multi-year plan to reestablish itself as a leading player in the game. While you’re unlikely to see surging growth, there is the possibility of a steady increase over time instead.
Where to buy the best industrial shares
To get your hands on some industrial stock, you need to find a broker. We have reviewed all the leading options and any of the trading platforms below is a good place to start.
What is an industrial stock?
Any company that’s involved in producing equipment, machinery, or supplies for the construction or manufacturing sectors. While this often means developing heavy-duty hardware like engines, it can also mean creating the technology to make those sectors more efficient, or operating the transport that moves their goods around.
Are industrial shares a good investment?
It depends on the current state of the global economy and the makeup of the rest of your portfolio. Industrial stocks tend to be cyclical, which means they do well when the economy is good, and less well during recessions or times when there’s not as much free cash to go around.
While it pays to be cautious, industrial companies tend to perform very well when the market is good – often outperforming other sectors by a large margin. Often the best way to invest is to balance some cyclical companies, like the industrial stocks above, with a few more defensive investments, like supermarkets or utilities.
If you decide to invest in industrial shares, then you want to keep track of how the economy is looking at the moment. You can do so using the links below, which also features our most up-to-date analysis on the state of the industrial market.
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