The 8 Best Industrial Stocks to Buy in 2022

When 2022 arrived, investors were optimistic about the U.S. economy recovering in the aftermath of the pandemic. But unfortunately, due to a variety of factors such as high inflation, disruptions in the supply chain, increases in interest rates, and Russia’s unprovoked war on Ukraine, the industrial sector is suffering, down 2.9% since the beginning of the year. However, not all is doom and gloom. There are plenty of industrial stocks that are expected to rebound. Here are 8 of them:

Honeywell International Inc. (HON)

This multinational industrial conglomerate based in Charlotte, North Carolina specializes in a variety of fields including aviation, automation, and the building of equipment. There are many reasons why this is an appealing stock. Although the demand for N95 masks — which Honeywell produced in large quantities — has dropped since the height of the pandemic, it will remain the most important contributor to the company’s growth in the long term. In fact, over the next five years, it is expected that Honeywell will see around 5% compound growth per year. The stock price as of April 16 is $195, but its fair value is estimated to be $230.

Southwest Airlines Co. (LUV)

Southwest Airlines was expected to lead the way in post-pandemic travel, but unfortunately things haven’t progressed as quickly as analysts had hoped. The increase in oil prices along with a resurgence in Covid in the form of the omicron variant put a damper on travel. Nonetheless, it is nearly certain that travel capacity will recover completely to pre-pandemic levels, and in particular business-related travel will experience a rally. The company’s stock price is around $46 as of April 16, with a fair value estimate of $65.

Boeing Co. (BA)

Boeing is a world leader in producing commercial airplanes and plays a crucial role in the U.S. military-industrial complex. When its entire fleet of 737 Max passenger planes were grounded, this had a negative impact on the short-term prospects of the company, but in the long term it still holds huge potential, especially when it comes to emerging markets. Although there have been tensions between the U.S. and China, Boeing remains a major player in China’s aviation industry, where demand growth is expected to increase by 25% over the next 10 years. As of April 16, Boeing is trading at around $181, but its fair value is estimated to be $249.

General Electric Co. (GE)

General Electric is an industrial conglomerate that focuses on a variety of technologies including medical and imaging equipment, clean energy, and engines for airplanes. Since the beginning of the year, the company’s stock price is down nearly 10%, but analysts see this as more reason to view it as an opportunity. One of the reasons why GE is going to be in good shape going forward is the strong order and backlog growth. The company also plans to spin off its energy and health care businesses, which will ultimately help drive up stock prices. As of April 16, the stock price is around $90 while its fair value is approximately $133.

3M Co. (MMM)

3M is another conglomerate that provides products in a variety of sectors including health care and industry. As of April 16, the stock prices are at around $147 in part because of legal uncertainty. The company is facing lawsuits claiming they sold defective combat earplugs to the U.S. military. Nonetheless, there are plenty of reasons to find 3M stock to be appealing, including its high yield dividend (currently at 4%) and their strong financials. This is predicted to grow to 6% and even under the worst-case scenario regarding their lawsuit, the effects will only be temporary. The fair value of their stock is $192.

FedEx Corp. (FDX)

FedEx is the world’s leading shipping company that also offers truck freight and logistics services. At the moment FedEx stock prices have taken a bit of a hit due to labor shortages, but in the long term, it is bound to recover. In particular, they hold an advantage of its main rival UPS in terms of delivering packages at a speedier rate. In addition, E-commerce certainly isn’t going to slow down. The company’s stock is priced at $205 as of April 16, but its fair value is estimated to be $258.

Emerson Electric Co. (EMR)

Emerson Electric might not be as well known as the other companies on this list, but it’s definitely making strides. This global industrial technology firm based in Ferguson, Missouri is already off to a good start, reporting 7.5% revenue growth over the current fiscal year. The industrial and automotive sectors hold a lot of promise as well, with strong growth expected in the short- and long-term. On April 16 the company’s stock price was around $92 while its fair value is estimated to be $113.

Parker-Hannifin Corp. (PH)

Headquartered in the Cleveland metropolitan area, Parker-Hannifin specializes in industrial motion and control technologies. Even with the current economic environment with high inflation and supply chain disruptions, the company’s management has great confidence in their long-term prospects. Indeed, in the most recent quarter, the company generated 15% revenue growth in the North American market and 14% in its international markets. It holds intellectual property rights on around 85% of its technologies, which makes the company even more valuable. As of April 16, the stock price sits at around $273, and it has a fair value estimate of $325.