The industrial sector is made up of companies that produce and sell machinery, equipment, and supplies that are used in construction and manufacturing, as well as companies that provide services related to said machinery and equipment. Well-known companies in this sector include General Electric Co. (GE), Lockheed Martin Corp. (LMT), and 3M Co. (MMM). The industrial sector, as measured by the Industrial Select Sector SPDR ETF (XLI), has performed roughly in line with the S&P 500 over the past year. XLI posted a 12-month trailing total return of 19.4% versus the S&P's 19.7% based on numbers as of November 21, 2019.
Below, we'll examine the top three stocks in the industrial sector for best value, fastest earnings growth, and most momentum.
Industrial Stocks with the Best Value
Here are the industrial stocks in the S&P 500 with the lowest 12-month trailing price-to-earnings (P/E) ratio in the sector. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Industrial Stocks with the Best Value|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E|
|Johnson Controls International Plc. (JCI)||42.41||33.0||6.5|
|Delta Air Lines Inc. (DAL)||55.67||36.0||7.8|
|American Airlines Group Inc. (AAL)||28.23||12.4||8.0|
- Johnson Controls International Plc.: Headquartered in Ireland, Johnson Controls is a multinational conglomerate that produces and sells HVAC equipment, building automation, security, fire detection, batteries, and other related products. The company also offers building control systems, energy management, and integrated facility management services. Johnson Controls announced earlier this month that CFO Brian Stief would be retiring at the end of 2020. The company said it will begin an external search for a new CFO.
- Delta Air Lines Inc.: Delta serves customers worldwide, providing scheduled air transportation for passengers, freight, and mail. The company also offers flight status information, bookings, baggage handling, and other related services.
- American Airlines Group Inc.: American Airlines offers airline services worldwide, including scheduled air transportation services for passengers and cargo. The company recently announced that it would be adding eight additional domestic routes for the summer of 2020 in order to meet strong demand for air travel.
Industrial Stocks with the Fastest Earnings Growth
Here are the industrial stocks in the S&P 500 with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Industrial Stocks with the Fastest Earnings Growth|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|W.W. Grainger Inc. (GWW)||312.35||16.8||133.5|
|Nielsen Holdings Plc. (NLSN)||20.05||7.1||131.3|
|Flowserve Corp. (FLS)||48.21||6.3||108.8|
- W.W. Grainger Inc.: W.W. Grainger is a distributor of maintenance, repair, and operating products. The company's products include motors, HVAC equipment, lighting, hand and power tools, pumps, and electrical equipment.
- Nielsen Holdings Plc.: Nielsen provides global marketing data collection and analytics services, including demand analysis, product development, sales measurement, price and trade promotion strategies, and product launch services. The company recently announced plans to spin off its business segment that tracks consumer preferences . The spinoff will result in two separate public companies, with one focused on global media and the other on Nielsen's data platform business.
- Flowserve Corp.: Flowserve is a designer, manufacturer, distributor, and servicer of industrial flow management equipment. The company offers pumps, valves, and mechanical seals primarily for the refinery and pipeline segments of the petroleum, chemical processing, power generation, and water treatment industries. Flowserve reported an adjusted EPS that increased roughly 20% year-over-year for the most recent quarter that ended September 30.
Industrial Stocks with the Most Momentum
These are the industrial stocks in the S&P 500 that had the greatest total return over the past 12 months.
|Industrial Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return|
|TransDigm Group Inc. (TDG)||575.00||30.8||84.7|
|Copart Inc. (CPRT)||84.92||19.7||79.5|
|Global Payments Inc. (GPN)||180.51||54.3||75.1|
|S&P 500 (SPX)||N/A||N/A||19.7|
|Industrial Select Sector SPDR ETF (XLI)||N/A||N/A||19.4|
- TransDigm Group Inc.: TransDigm Group designs, produces, and supplies engineered aircraft components for use on commercial and military aircraft. The company reported earnings for its fiscal fourth quarter that ended September 30.
- Copart Inc.: Copart is a provider of online auctions and vehicle remarketing services for salvaged vehicles that are primarily sold to licensed dismantlers, rebuilders, and used vehicle dealers. The company reported diluted EPS of $0.91 for its fiscal first quarter of 2020, which amounted to an increase of 93.6% compared to the same period last year.
- Global Payments Inc.: Global Payments is a provider of payment technology services, including electronic transaction processing, information systems, and other related services. The company recently announced earnings for the third quarter, reporting quarterly EPS of $1.70.
YCharts. "YCharts," Accessed Nov. 21, 2019.
Johnson Controls International PLC. "Johnson Controls appoints Brian Stief Vice Chairman and Chief Financial Officer; To Step Down in December 2020," Accessed Nov. 22, 2019.
American Airlines. "20 New Routes for Summer 2020," Accessed Nov. 22, 2019.
Nielsen Holdings Plc. "Nielsen To Separate Into Two Leading Global Companies," Accessed November 22, 2019.
Flowserve Corporation. "Flowserve Corporation Reports Third Quarter 2019 Results," Accessed Nov. 22, 2019.
TransDigm Group Incorporated. "Transdigm Group Reports Fiscal 2019 Fourth Quarter and Year-End Results," Accessed Nov. 22, 2019.
Copart, Inc. "Copart Reports First Quarter Fiscal 2020 Financial Results," Accessed Nov. 22, 2019.
Global Payments Inc. "Global Payments Reports Results for Third Quarter 2019 and Increases 2019 Outlook," Accessed Nov. 22, 2019.