The best industrial stocks offer their investors a sturdy combination of long-term growth, strong financials, and broad institutional backing. The riskier micro-sectors like vaping and marijuana are better left for more opportunistic investors.Arguably the most important component of any successful business is its ability to effectively package and market its products in a way that continues to drive demand from customers. From beverage companies to food manufacturers, every company has some sort of product it needs to put into a box or store on shelves somewhere. As the old saying goes, success is often about “knowing your audience”—and for most businesses, that means focusing on your end customers rather than suppliers or intermediaries. This requires identifying which channels are most profitable and where you have the biggest opportunity for growth.
3M Co.
The St. Paul, MN-based 3M Co. is one of the most diversified industrial companies in the world. It began as a mining business, but over the past century has grown into a $93 billion conglomerate with operations in almost every corner of the industrial packaging sector.The firm is particularly focused on the packaging of consumer goods and engineered products, which account for about two-thirds of its business. The firm generates about a fifth of its income from healthcare products, including the materials and technologies used in medical devices.This exposure to healthcare materials and technologies is a key reason 3M shareholders have received a boost recently. The sector has been receiving a lot of attention, thanks to the US administration’s increased focus on healthcare costs. This has led to an increase in healthcare packaging technology as pharmaceutical companies and other healthcare providers seek ways to cut costs. 3M is in a very good position to benefit from this increased focus on healthcare costs.
Dell Technologies Inc.
Dell Technologies Inc. is the name of the new firm created by the recent $67 billion merger between computer hardware maker Dell and software and services provider EMC.The combined company has more than $74 billion in annual sales and makes everything from servers, storage, and networking equipment to computer monitors, software, and security services. As such, the firm is a major player in the IT sector, making it an attractive stock in the current market climate.While Dell is best known for its computer hardware and software, EMC is best known for its data storage and security services, which should result in an even more diversified company.
International Paper Co.
The Green Lake, WI-based International Paper Co. is one of the largest paper and forest products companies in the world. While the firm has historically been focused on producing raw materials for industrial uses, it has been moving more heavily into industrial packaging and other downstream operations.Currently, industrial packaging operations account for about a third of the company’s business, while the pulp and paper segment makes up about two-thirds. As the paper and forest products industry faces a growing number of headwinds, IP has sought to hedge its exposure by focusing on growing its industrial packaging operations.In particular, IP has focused on growing its packaging operation for consumer goods, which now accounts for about half of the firm’s industrial packaging revenues. IP has been particularly focused on expanding its offerings related to fresh foods, beverages, and household products.
Amerco Inc.
The Kansas City, MO-based Amerco Inc. is best known as the parent company of Hamblin-Black and Rediform, companies that produce gloves, aprons, and other protective products used in food service and manufacturing settings.While Amerco Hamblin-Black is the largest supplier of food service gloves in the US and Rediform is a major producer of aprons, gloves, and other protective garments in the US and Canada, the company also manufactures products under a variety of other brand names.Amerco’s products are used by customers in a wide range of industries, including healthcare, food service, manufacturing, retail, and energy.
Royce Holdings Corp.
The Los Angeles, CA-based Royce Holdings Corp. is the parent company of Royce Rolls, one of the oldest manufacturers of paper and paperboard products in the US. Royce also owns T.E. Brown, which manufactures packaging materials including paper bags, labels, and corrugated boxes.Royce is best known for its high-quality paper products, which are used in a variety of industries including apparel, health and beauty, food and beverage, and general merchandise.While the company has a long history, it has recently been investing in new technologies that could allow it to expand into new markets. Investments include a new corrugated box plant in China, a paper bag plant in the US, and investments in new products and technologies.Royce has also been aggressively expanding its international operations, both through acquisitions and by investing in new facilities in a variety of countries.
UltraNet Ltd.
The Tel Aviv, Israel-based UltraNet Ltd. is a leading global shipping and logistics company. The company owns and operates a variety of ships and land-based operations, including ports, rail terminals, and warehouses.The firm is particularly focused on providing logistics services for Chinese importers shipping goods to the West. It has also invested in a new series of refrigerated shipping containers designed to reduce the time it takes for food to reach distant markets.Despite being focused on providing logistics services, UltraNet also owns and operates a large fleet of dry-bulk ships for carrying raw materials such as grains and oilseeds.The combination of shipping, ports, and logistics operations makes UltraNet a compelling investment for any investor seeking exposure to the global shipping sector.
Summing up
The best industrial stocks offer their investors a sturdy combination of long-term growth, strong financials, and broad institutional backing. The riskier micro-sectors like vaping and marijuana are better left for more opportunistic investors. The key is finding a company that can grow through a combination of organic growth and strategic acquisitions, and has a dedicated management team focused on growing the business while keeping costs under control.These are the stocks that have consistently delivered top industrial returns, and investors can expect them to continue to do so in the future.
Read More: Top Industrial Packaging Stocks You Can Buy Today