© Reuters. 3 Industrial Stocks to Buy on the Dip
The industrial sector is now leading the U.S. economy’s resurgence after being severely impacted last year. President Biden’s proposed $2 trillion-plus infrastructure spending bill should further boost the sector’s growth. With this in mind, we think it could be wise to buy the dip in leading players in this space Eaton (NYSE:), Crane (CR), and Atkore (ATKR). So, let’s evaluate these names.The industrial sector was hit hard by the COVID-19 pandemic last year because of business lockdowns and social distancing requirements. However, the easing of restrictions this year on the back of widespread vaccinations is facilitating an impressive recovery by the industrial sector. Furthermore, President Biden’s emphasis on industrial growth in his $2 trillion-plus infrastructure spending proposal is expected to further invigorate the sector.
Total industrial production in the United States increased 16.5% year-over-year in April 2021. If Biden’s American Jobs Plan is passed, aerospace, capital goods, and industrial technology should witness solid growth. Consequently, the sector has been benefiting from favorable investor sentiment, as evidenced by Vanguard Industrial ETF’s (VIS) 15.8% year-to-date returns compared to SPDR S&P 500 ETF Trust’s (SPY) 10.2% gains.
The industrial sector’s growth is highly correlated with economic growth. So, as the economy keeps growing, industrial companies should witness solid business growth. The global market for industrial machinery is expected to grow at a 5% CAGR over the next six years to hit $794 billion by 2027. Given this solid backdrop, we think the recent price dip in Eaton Corporation plc (ETN), Crane Co. (CR), and Atkore Inc. (ATKR) provides a good buying opportunity.
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