Investors should focus on a very diversified portfolio, and manufacturing stocks are a great addition to that. Manufacturing and other industrial companies can offer a more stable ROI than more volatile industries, such as technology and energy stocks.
Industrial companies tend to weather difficult times in the market better than others because manufacturing jobs and products are a necessity to day-to-day life, even during economic hardships. Stock in other volatile industries is much more susceptible to unpredicted market fluctuations.
Investors should focus more on investing in the industrial sector due to inherent growth potential, decent dividend yields and typically lower volatility. Manufacturing businesses aren’t as cutting-edge and exciting as other information technology stocks, which have seen exponential growth and a considerable amount of attention lately. But, that considerable potential of significant returns also brings the chance of loss.
These manufacturing stocks are all well-established companies that have seen a recent increase in their share price due to a number of factors but, most importantly, increased profits compared to the year before and raised guidance for revenue and earnings per share for the rest of 2023, which has left these businesses in an excellent position for the future.
Flowserve (FLS)
Flowserve (NYSE:FLS) produces flow management equipment for use in the energy, chemical and environmental industries. The company’s products include pumps, valves, mechanical seals and other instrumentation.
The company’s share price has risen by almost 16% over the past year. It has a solid second-quarter earnings report which reported a 22% jump in total sales and saw an earnings per share increase of 14.7% year-over-year to $0.39 per share. It also raised its full-year guidance on revenue due to the strong second quarter. On August 16, Flowserve announced a quarterly dividend of $0.20 per share payable on October 6.
The company’s CEO stated in their second-quarter earnings release that they expect Flowserve to experience overall growth in total sales through 2024.
Caterpillar (CAT)
Caterpillar (NYSE:CAT) produces mining and construction equipment, such as forklifts, excavators, bulldozers and other heavy machinery, as well as part replacement and maintenance segments. The company is one of the largest publicly traded industrial companies, with a market cap of $140 billion.
Over the past year, CAT stock has grown by 37% due to increased profit margins recently. On the company’s most recent earnings release for the second quarter of 2023, it stated a 22% increase in its total sales and net income that rose by 75% compared to the second quarter of 2022. The company’s sales were up by over 30% in North America. In another region such as Asia, sales remained practically unchanged.
Caterpillar also announced that over $2 billion was paid back to its shareholders as a part of the share repurchase program.
Sterling Infrastructure (STRL)
Sterling Infrastructure (NASDAQ:STRL) engages in construction solutions for e-infrastructure and transportation segments. The company develops data centers, warehouses, highways, bridges and single-family homes throughout the U.S.
Over the past year, Sterling’s stock price has risen by almost 200%. It has seen consistent growth in revenue throughout this year. On August 7, the company released second-quarter earnings, which stated a total sales increase of 13% and earnings per share growth of 48% compared to 2022. Its e-infrastructure segment saw a 16% increase in profits within the same time period.
The company also raised its sales guidance for the rest of 2023. Following the second quarter earnings report and the increased guidance, Sterling Infrastrure’s share price rose by 24%.
As of this writing, Noah Bolton held a LONG position in FLS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.