Industrial sector stocks were among the best performers this year as investors abandoned the 2020 high-flyers, technology company stocks and piled into names sensitive to the improving economic outlook.
Indeed, the industry's leading ETF – Industrial Select Sector SPDR® Fund (NYSE 🙂 – is up about 17% since the start of the year, hitting its best level ever in recent days. For its part, it is up only 10.5% in the same time frame.
Below we highlight three leading names in the industry. Each is worth considering, given the growing optimism surrounding the strengthening global economy.
1. Caterpillar
Year-to-date performance: + 31.5%
Market Cap: $ 128.9 Billion
Caterpillar (NYSE 🙂 – widely regarded as a model of economic activity – is one of the world's leading manufacturers of construction, mining and energy equipment.
The Deerfield, Illinois-based industrial machinery manufacturer thrived this year, benefiting from growing optimism about the global economy, which has also sparked a spectacular rally from a wide variety of commodities.
Since the beginning of the year, Caterpillar has increased its inventory by approximately 31.5%. More impressively, stocks have gained roughly 120% over the past 12 months, much better than the comparable returns of both the S&P 500 and S&P 500.
After hitting a new all-time high of $ 242.75 at the start of the week, CAT shares finished at $ 239.30 on Tuesday, earning the machine giant a market cap of $ 128.9 billion.
Caterpillar reported April 29, shattering expectations for both revenues and revenues amid a booming US housing market and a revival in demand for raw materials.
The Heavy Machinery Colossus reported earnings per share of $ 2.87 for the fiscal first quarter of 2021, a 79% improvement from earnings per share of $ 1.60 in the same quarter a year earlier.
Revenue increased nearly 13% year-over-year to $ 11.9 billion, which was much higher than the estimated $ 10.9 billion. That was one of the biggest & # 39; beats & # 39; of the company over the past ten years.
As explained in their earnings report:
"The increase was driven by higher sales volume driven by higher end-user demand and the impact of changes in dealer inventories."
Although Caterpillar refrains from providing full year 2021 guidance due to the ongoing impact of COVID-related uncertainty, the company should continue to perform well in the coming months given the improving outlook for construction and mining equipment sales in a recovering global economy.
2. Union Pacific
Performance year-to-date: + 8.8%
Market Cap: $ 149.1 Billion
Founded in 1862, the Union Pacific Corporation (NYSE 🙂 is the second largest freight railroad operator in the United States. It mainly focuses on the transportation of cargo such as coal, grains, and.
The railroad giant also provides transportation services for construction products, industrial chemicals and fertilizers, plastics, metals and ores, as well as finished cars, auto parts, intermodal containers and truck trailers.
Shares of the Omaha, Nebraska-based company, which operates 8,300 locomotives over 32,300 route miles across 23 states, are up about 9% to date and are reaping the benefits of increased shipping volumes amid a rebounding economy.
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UNP stock – which is up about 45% in the past 12 months – climbed to a record high of $ 231.10 on Monday, before closing at $ 226.61 last night, earning it a valuation of $ 149. 1 billion.
Union Pacific delivered its first quarter and revenue on April 22, which fell short of analyst estimates, mainly due to the negative impact of the crippling winter storm and freezer that swept much of the southern US in February. brought to a standstill.
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The Freight Railroad Company said it earned $ 2.00 per share and did not have EPS forecasts of $ 2.06 and below $ 2.15 in the same quarter last year. Sales were $ 5.0 billion, down 4% from the same period last year. The consensus expectations called for revenue of $ 5.05 billion.
However, in a sign that bodes well for the future, Union Pacific confirmed its full year outlook despite disappointing Q1 figures.
According to Lance Fritz, CEO of Union Pacific, in the publication of UNP's earnings:
“We have generated solid productivity through efficient use of our resources, despite the significant weather conditions that affected most of our network in February and early March.
"An improving economic outlook, our continued commitment to value-based prices that exceed inflation and the potential for strong productivity give us confidence to confirm our 2021 outlook."
3. Old Dominion Freight Line
Year-to-date performance: + 35.3%
Market Cap: $ 30.1 Billion
Another heavy hauler, Old Dominion Freight Line (NASDAQ :), operates as a less-than-truckload (LTL) carrier, providing regional, interregional and national LTL services. In addition to core LTL services, the company also offers various value-added services such as truckload brokerage, warehousing and supply chain advice.
Founded in 1934, the Thomasville, North Carolina-based trucking company owns nearly 23,000 trailers and more than 9,200 tractors. It also has 245 service centers and 42 maintenance facilities.
The car maker's stock has been thriving since the beginning of the year, up 35%. Year over year, shares are up 70% amid a recovery in the trucking industry.
ODFL shares settled at $ 264.14 yesterday, ahead of the recent high of $ 276.09, giving the mid-cap company a valuation of $ 30.1 billion.
Old Dominion reported sales growth when it released its latest results on April 22, benefiting from an improving domestic economy and increased freight demand.
Earnings per share increased 53% from the same period last year to $ 1.70, far ahead of expectations for earnings per share of $ 1.58. Sales, meanwhile, were up 14% year-on-year to $ 1.13 billion, which was higher than estimated sales of $ 1.13 billion.
LTL tons and LTL per hundred weight revenues – two major measures – rose 8.3% and 5.6% respectively from the same period a year ago. In addition, LTL shipments increased 6.9% compared to last year, while LTL shipments per day increased 8.6% year over year.
In the press release Greg Gantt, CEO of Old Dominion said:
“We are gaining market share as demand for our industry-leading service continues to grow. In addition, we think the domestic economy is getting stronger, while industry capacity is generally limited.
"We are encouraged by these trends and believe that the combination of our value proposition, existing capacity and continued investment to expand our capacity will support future revenue growth opportunities."
