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3 Industrial Stocks to Make Investors Happy in 2022
Stock Analysis & Ideas

3 Industrial Stocks to Make Investors Happy in 2022

The U.S. stock market is jittery about the Federal Reserve’s hike in interest rate, the ongoing conflict between Russia and Ukraine, rising oil prices, and supply-chain restrictions. Amid these challenges, let’s understand how can investors explore the Industrial Goods sector to find some of the best investment options.

Industrial companies have rebounded well from the adverse impacts of the pandemic. Corporate revenues and margins have gained momentum, and companies are exhibiting strong growth potential. Their pricing actions seem strategic to handle the short-term impacts of supply-chain and cost-inflation woes.

On the broader front, improving industrial production in the U.S. is a leading indicator of the sector’s health. In February, industrial production in the country expanded 7.5% year-over-year, while the same increased 4.1% in January.

Additionally, growth in the country’s GDP (7% in the fourth quarter), investments in infrastructural development, and a rise in export demand for industrial goods are other indicators supporting healthy industrial activities.

The TipRanks data reveals that out of 436 companies in the Industrial Goods sector, roughly 78% carry either a Strong Buy or Moderate Buy consensus rating. Choosing from such a wide range of options can be a daunting task for anyone.

At this juncture, we used the TipRanks Stock Screener tool to ease the task for the investors seeking exposure in the stock market.

The Stock Screener tool provides investors with an option to choose stocks based on multiple parameters, including sector, market capitalization, and others.

By focusing on companies with market capitalization >=$10 billion, carrying Strong Buy consensus rating, price target upside of >20%, and Smart Score within 8-10 range, we have selected three Industrial stocks that are strongly positioned to give investors the bang for their buck.

Three Investment-Worthy Industrial Stocks

FedEx Corporation (NYSE: FDX): The $58.7-billion company provides business, transportation, and e-commerce services across multiple nations.

The Memphis, TN-based company’s adjusted earnings increased 32.3% year-over-year in the third quarter of Fiscal 2022 (ended February 28, 2022). Revenues were up 9.8%. For the Fiscal Year 2022 (ending May 2022), FedEx anticipates adjusted earnings to be within the $20.50-$21.50 per share range.

An analyst at Robert W. Baird, Garrett Holland, recently reiterated a Buy rating and the price target of $300 (32.41% upside potential) on FedEx.

Despite declining 12.7% year-to-date, FedEx has a Strong Buy consensus rating based on 18 Buys and three Holds. FedEx’s average price target is $295.75, mirroring 30.53% upside potential from current levels. The delivery service provider scores a 9 out of 10 on TipRanks’ Smart Score rating system.

Energy Transfer LP (NYSE: ET): Based in Dallas-TX, Energy Transfer engages in the storage of natural gas as well as transportation of natural gas liquids, natural gas, and crude oil. The $31.4-billion partnership operates mainly in the U.S. and Canada.

Shares of Energy Transfer have swollen 19.2% year-to-date. In the fourth quarter of 2021, Energy Transfer’s earnings per limited partner unit increased 52.6% year-over-year on the back of an 85.9% increase in revenues.

Energy Transfer is well-positioned to benefit from synergies of acquisitions completed in the past few months (including that of Enable Midstream), healthy demand for midstream infrastructure, and growth investments (including in the Gulf Run Pipeline project). A 15% hike in quarterly distributions and debt-reduction efforts are reflective of Energy Transfer’s strong cash position.

Recently, Jeremy Toner, an analyst at J.P. Morgan, maintained a Buy rating on Energy Transfer with a price target of $15 (47.06% upside potential).

Energy Transfer’s Strong Buy consensus rating is based on eight Buys and ET average price target of $13.88 mirrors 36.08% upside potential from current levels. The midstream-service provider scores a ‘Perfect 10’ on the TipRanks Smart Score rating system.

Nordson Corporation (NASDAQ: NDSN): The company makes and sells products and systems that help in controlling, dispensing, and application of materials including sealants, adhesives, and coatings. The company is based in Westlake, OH, and has a $13.4 billion market capitalization.

In the first quarter of Fiscal 2022 (ended January 31, 2022), the company’s adjusted earnings per share increased 57% year-over-year, while its revenues expanded 16%. For Fiscal 2022 (ending October 2022), Nordson anticipates revenue growth to be at the high-end of the 7%-10% range predicted earlier. Likewise, growth in earnings is expected at the high end of the previous projection of 14%-18%.

The company is benefiting from solid product offerings, synergies from acquired assets (including NDC Technologies), and strengthening activities in medical, industrial, and electronics markets.

An analyst at Berenberg Bank, Andrew Buscaglia, reiterated a Buy rating on Nordson with a price target of $315 (36.73% upside potential).

Despite witnessing an 8% year-to-date decline, Nordson secures a Strong Buy consensus rating based on three Buys. Meanwhile, Nordson’s average price target of $295.67 suggests 28.34% upside potential from current levels. The flow-control specialist scores a ‘Perfect 10’ on TipRanks.

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To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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