Industrial stocks were some of the biggest risers last year, rallying sharply across the board. With the U.S. economy running on all cylinders, industrial companies have a lot of reasons to be optimistic. Today we’ll look at what these industrial growth stocks are worth watching in 2022 and into the future.
- Canada Goose Holdings Inc. (TSE: GOOS)
In Canada Goose, Holdings Incorporated is one of those rare multi-faceted businesses that has been able to accomplish the near-impossible, achieving stellar revenue growth with consistently low costs.
Canada Goose’s business model is very simple; they make some of the warmest outerwear and then market it to consumers of luxury goods. The company does this by placing high-end coats in more than 100 stores globally, including upscale department stores like Harrods in the U.K. and Saks in the U.S.
The company’s business model makes it very easy for investors to see how they add value to their shareholders. Over the past year, Canada Goose has grown its revenue by more than 30%. There is always some risk when investing in a small firm like Canada Goose, as with most growth companies.
With a market cap of nearly $2.4 billion, it is easy for any single investment to have a very large impact on its valuation. Canada Goose also must deal with the typical small business risk of something going wrong with one of their suppliers or customers that would force them out of business.
Canada Goose reports their earnings on the last Tuesday of each month. While this may seem like a difficult time to invest in Canada Goose, their shares are expected to grow an impressive 12% over the next two years and could present a great option for investors that want exposure to aviation and aerospace companies.
- General Dynamics Corporation (NYSE: G.D.)
General Dynamics Corporation is a classic example of a company that has successfully transitioned from one industry to another. In 2015, General Dynamics bought up aircraft-maker Gulfstream. The company now derives 65% of its revenue from aviation and aerospace products, which is drawn from its defense units.
General Dynamics is now the second-largest manufacturer of military helicopters in the world. The company also builds submarines, tanks, and warships. This diversification has helped shield the company from more volatile swings that affect defense stocks. Although General Dynamics has seen some volatility since 2015, its shares are still up over 10%.
With a market cap of just under $70 billion, it is easy to see why investors might shy away from a company like General Dynamics. The company has around $20 billion in debt on its balance sheet and a dividend yield of under 3%.
With everything going on with the U.S. economy, investors should be looking for companies that can grow their revenue while keeping costs low. General Dynamics fits the bill by growing earnings at a rate of 14% last quarter. The company is expected to grow earnings by almost 7% in the current year and about 5% next year, making it a great option for investors looking for exposure to aircraft and aerospace companies.
- Nucor Corporation (NYSE: NUE)
The United States Steel industry has been in decline since the 1970s, but Nucor Corporation has been able to turn the tide on many years of losses. In 2016, North American steel producers reported a total loss of $1 billion due to a 31% decline in shipments.
Nucor was not immune from those struggles as it also saw shipment volumes drop by double-digits, leading the company’s earnings to fall by a massive 75%.
For the full year of 2016, Nucor reported that it returned to profitability in its steel business, with earnings up by more than 150% from 2015. The company’s turnaround is largely due to increased demand from the construction industry and oil drilling sector. This has helped push prices for steel products higher, and Nucor has been at the forefront of those gains.
Nucor is expected to grow earnings by over 20% in 2022, making it a great option for anyone looking for exposure to aerospace companies. The company currently pays a dividend yield of 2.2%, with quarterly payments distributed every March, June, September & December.
Shares in Nucor increased by over 7% last year, but the company still has plenty of room to grow. With a market cap of around $20 billion, investors can get exposure to an industry expected to see growth well into 2022 and beyond.
Several companies offer investors exposure to the aerospace sector without the volatility of owning an aircraft manufacturer. Although many of these businesses are not expected to see growth in 2022, they present investors with a way to get involved in the industry while removing some of the risks associated with owning individual aircraft makers.
Nucor is one of the largest U.S. steel producers and its successful turnaround after years of losses is a testament to management’s ability to adapt in the face of changing market conditions.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.