Should You Invest in the Industrial Sector in 2022? 3 Industrial Stocks to Consider


A healing economy often favors specific sectors, and the industrial sector is no exception. In fact, forward-thinking vaccines are thought to be saviors and boost the economy in 2021. But in 2021, some particular sectors ran out of steam and saw Q3 catch up with commodity-related cyclical sectors, including energy, industrial and materials. Investors tend to favor communication services, equipment and health care.

It’s a new year, but should you load up on industrial stocks or not even entertain the idea? Let’s walk through some up-and-comers in this sector that you may want to add to your portfolio in 2022.

What is the Industrial Sector?

The industrial sector is a part of the economy that includes businesses assisting other businesses in the manufacture and distribution of their products. Because products and services go to other businesses rather than directly to consumers, it is considered a secondary sector driven by supply and demand from other businesses in other sectors.

Divisions within the Industry Sector

The industrial products sector includes companies involved in aerospace and defense, industrial machinery, tools, lumber, construction, waste management, housing works, and cement production. Let’s go through each of these divisions.

  • Aerospace and defense: The industrial sector includes the aerospace and defense industry, which produces civil or military aerospace and defense equipment, parts or products. Examples of products include military aircraft, helicopters, drones, tanks, ships and other vessels.
  • Industrial machinery and equipment: Industrial machines produce tools and heavy equipment for the construction and mining industries as well as machines for the development of energy production and distribution infrastructure. The development of industrial machinery can use a variety of processes, such as metal forging, casting, forging, welding and more. Industrial manufacturing tools and equipment can range from small machinery to smaller parts. For example, the industry may involve power saws, drills, hand tools, metal-working machines, polishing machines, presses, boilers, industrial ovens, small parts and facility hardware and equipment (industrial heaters, furnaces, forklifts and other types of large industrial machinery.)
  • board: The lumber industry refers to forestry, logging and manufacture of primary forest products and wood products such as furniture and secondary products such as wood pulp.
  • Construction: The construction industry focuses on larger manufacturing and industrial buildings, such as the construction of waste and waste disposal plants, factories, plants, mills, industrial laboratories and testing facilities.
  • Waste management: The waste management industry is concerned with all aspects of waste management, waste disposal, waste recycling and waste prevention.
  • Built -in housing: Manufactured housing is concerned specifically with housing units that are built primarily or completely outside the premises before being moved to a piece of property on which it is located, which is grouped into factories.
  • Cement production: Concrete is used in the manufacture of buildings, highways, bridges, roads etc. and benefits from large -scale infrastructure production.

Does this list give you any emerging ideas of stocks you might consider?

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Three Stocks to Consider in the Industrial Sector

The year 2022 could bring healthy revenues due to underlying demand and supply chain normalization and inflation that could be the head of 2022. How can you wear your portfolio within the industry sector? Try these stocks.

Generac Holdings (NYSE: GNRC)

Generac Holdings Inc. (NYSE: GNRC), headquartered in the design and manufacture of power generation equipment and other power products such as energy storage systems and power products for the residential, light commercial and industrial markets. Generac makes portable, residential, commercial and industrial generators.

The company’s production increased in Q3 2021 and showed year-over-year revenue growth of 34% to a record $ 943 million and shows consistent outperformance in the market. Residential product sales grew 33% to $ 609 million, a wide margin, from $ 459 million in sales since last year. Its commercial and industrial sales rose 47% to $ 258 million, from $ 176 million last year. Positive sales, earnings and stock price momentum are putting Generac hard on.

This year, the company acquired:

  • Chilicon Power, a designer and provider of solar grid-interactive microinverter and monitoring solutions.
  • Apricity Code Corporation, a company that makes energy technology solutions.
  • Off Grid Energy, a designer and manufacturer of industrial energy storage systems in the United Kingdom.
  • Tank Utility, a provider of IoT propane tank monitoring solutions for propane fuel logistics.

It also signed a purchase agreement to acquire ecobee, which makes smart thermostats for energy conservation.

Builders FirstSource Inc. (NYSE: BLDR)

Builders FirstSource Inc., headquartered in Dallas, supplies and manufactures building materials, manufactured components and construction services for factory-built roof and floor trusses, wall panels and stairs, vinyl windows, custom millwork, trim and engineered wood.The company makes items for homebuilders, subcontractors, remodelers and consumers in all areas of the country.

Q3 large outperformance, with total sales for the period of $ 5.5 billion, a 62.7% increase. Major organic sales rose 16.1%, while commodity price inflation contributed 38.6% to net sales. Major organic sales grew approximately 31.2%, led by 44.6% growth in manufactured products.

The company expects strong demand in single-family housing and strategies to drive growth above the market.

Applied Industrial Technologies (NYSE: AIT)

Applied Industrial Technologies (NYSE: AIT), based in Cleveland, Ohio, is one of the largest distributors and service providers of industrial motion and control technologies, with a focus on bearings, power transmission, fluid power, flow control, and automation solutions. Its service center-based distribution segment provides customers with a wide range of industrial products through a network of service centers and its fluid power and flow control businesses specialize in distribution. , creating and repairing hydraulic and pneumatic fluid power technologies and engineered flow control products and services. .

Q1 results showed net sales of $ 891.7 million, up 19.2% year-over-year. Applied Industrial Technologies rose 16.3% on an organic basis and showed net income of $ 53 million, or $ 1.36 per Share and free cash flow of $ 45 million. If you want dividends, the company also announced a quarterly cash dividend of $ 0.33 per common share.

Ready to Add Industrial Stock to Your Collection?

When looking for investment opportunities in the industry sector, look for stocks that are poised for growth and overall long -term benefits. Take a good look at a company’s financial history – a history of revenue and profit growth can be a sign of good things to come.

Should you invest $ 1,000 in Applied Industrial Technologies today?

Before you consider Applied Industrial Technologies, you’ll want to hear this.

MarketBeat tracks the highest rated and best performing Wall Street research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified five stocks that top analysts are quietly whispering to their clients to buy now before catching up with the broader market … and Applied Industrial Technologies is not on the list.

While Applied Industrial Technologies currently has a “Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.

See The 5 Stocks Here

Companies Mentioned in This Article

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