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11 Best Manufacturing Stocks To Invest In

In this article, we will look at the 11 best manufacturing stocks to invest in. If you want to explore similar stocks, you can also take a look at 5 Best Manufacturing Stocks To Invest In.

The manufacturing sector has been going through a rough patch in 2022, amid high inflation, stockpiling, muted demand, and supply chain problems. However, according to data from the Institute for Supply Management, economic activity in the manufacturing sector grew in September and registered a PMI reading of 50.9%. The Production Index increased 0.2% month over month in September and recorded a reading of 50.6%. The Prices Index fell 0.8% from August and recorded a reading of 51.7%. Industry-wise, nine manufacturing industries reported growth in September. These included nonmetallic mineral products, machinery, plastics & rubber products, transportation equipment, and computer & electronic products among others.

According to McKinsey & Company, the U.S. manufacturing sector accounts for $2.3 trillion, or roughly 11% of the country’s GDP. McKinsey analysts suggested that reviving the growth in the manufacturing sector can potentially create 1.5 million jobs and grow the GDP of the United States by 15% by 2030. Moreover, government efforts, such as the Bipartisan Infrastructure Law, are expected to restore the strength of the manufacturing industry and drive a manufacturing renaissance.

With a resurgence in the manufacturing sector underway, investors should start positioning their portfolios for a rebound. Some of the best manufacturing stocks to invest in right now include Emerson Electric Co. (NYSE:EMR), Deere & Company (NYSE:DE), and Caterpillar Inc. (NYSE:CAT). These stocks, among others, are discussed in detail in the article below.

Our Methodology

To determine the best manufacturing stocks to invest in, we reviewed companies from a variety of manufacturing sub-sectors and narrowed down our selection to stocks that had positive market sentiment. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and potential growth catalysts. We have arranged these stocks according to their popularity among elite hedge funds.

Best Manufacturing Stocks To Invest In

11. Modine Manufacturing Company (NYSE:MOD)

Number of Hedge Fund Holders: 15

Modine Manufacturing Company (NYSE:MOD) is a leading thermal management company that makes HVAC systems for a variety of end markets. Modine Manufacturing Company (NYSE:MOD) is currently trading cheaply relative to earnings, and as of October 7, the stock has a trailing twelve-month PE ratio of 7.35. On July 15, Modine Manufacturing Company (NYSE:MOD) announced that it has started full-scale production of data center chillers at its site in Virginia. Modine Manufacturing Company (NYSE:MOD) is one of the best manufacturing stocks to buy now.

On August 3, Modine Manufacturing Company (NYSE:MOD) announced earnings for the first quarter of fiscal 2023. The company reported earnings per share of $0.32 and beat EPS estimates by $0.20. The company reported a revenue of $541 million, up 9.38% year over year, and beat Wall Street consensus by $46.9 million.

At the end of Q2 2022, 15 hedge funds held stakes in Modine Manufacturing Company (NYSE:MOD). The total value of these stakes amounted to $86.15 million, up from $70.99 million in the previous quarter with 13 positions. The hedge fund sentiment for the stock is positive. As of June 30, GAMCO Investors owns more than 3.2 million shares of Modine Manufacturing Company (NYSE:MOD) and is the top shareholder. The investment covers 0.37% of Mario Gabelli’s 13F portfolio.

Like Emerson Electric Co. (NYSE:EMR), Deere & Company (NYSE:DE), and Caterpillar Inc. (NYSE:CAT), Modine Manufacturing Company (NYSE:MOD) is one of the stocks that can benefit from a resurgence in manufacturing activity.

10. Amcor plc (NYSE:AMCR)

Number of Hedge Fund Holders: 20

Amcor plc (NYSE:AMCR) manufactures packaging products and markets them in Europe, North America, Latin America, Africa, and the Asia Pacific. The company is one of the largest manufacturers of rigid plastics. The company pays a hefty dividend and is offering a forward dividend yield of 4.33% as of October 6. Amcor plc (NYSE:AMCR) is one of the best manufacturing stocks to buy now.

On August 22, Amcor plc (NYSE:AMCR) announced that it has wholly acquired a top flexible packaging plant in the Czech Republic. With this acquisition, Amcor plc (NYSE:AMCR) is well-positioned to capture more market share and benefit from strong demand and customer growth for flexible packaging in Europe. On August 18, Macquarie analyst John Purtell rerated Amcor plc (NYSE:AMCR) to Neutral from Outperform and reiterated his price target of A$19.

At the end of the second quarter of 2022, 20 hedge funds were bullish on Amcor plc (NYSE:AMCR). These funds held collective stakes of $252.4 million, up from $239.5 million in the previous quarter with 20 positions. As of June 30, Polaris Capital Management is the largest shareholder in Amcor plc (NYSE:AMCR) and has stakes worth $199.4 million in the company.

9. CNH Industrial N.V. (NYSE:CNHI)

Number of Hedge Fund Holders: 25

CNH Industrial N.V. (NYSE:CNHI) designs, manufactures, sells, and finances agricultural and construction equipment. The company operates in North America, Europe, South America, and international markets. At the end of the second quarter of 2022, 25 hedge funds were bullish on CNH Industrial N.V. (NYSE:CNHI). These funds held collective stakes of $606.25 million in the company.

On September 19, CNH Industrial N.V. (NYSE:CNHI) announced a stock buyback program worth $50 million. This is the first chunk of its $300 million share repurchase program. The company expects to buy back stock worth $300 million by October 12, 2023. As of October 6, CNH Industrial N.V. (NYSE:CNHI) is trading at a PE multiple of 9x and is offering a forward dividend yield of 2.41%. The stock is one of the best manufacturing stocks that pay dividends and is trading at a bargain right now.

This August, Deutsche Bank analyst Nicole DeBlase raised her price target on CNH Industrial N.V. (NYSE:CNHI) to $17 from $16 and maintained a Buy rating on the shares. On September 27, Baird analyst Mircea Dobre started coverage of CNH Industrial N.V. (NYSE:CNHI) with a buy-side Outperform rating and a $17 price target.

As of June 30, Harris Associates owns more than 96.5 million shares of CNH Industrial N.V. (NYSE:CNHI) and is the largest shareholder in the company. The fund’s stakes are valued at $1.1 billion.

Here is what Oakmark Funds had to say about CNH Industrial N.V. (NYSE:CNHI) in its second-quarter 2022 investor letter:

“We sold our position in Iveco Group (Italy), in favor of names that, in our opinion, offer a more favorable risk/return profile. Iveco Group’s arrival in the Fund stemmed from CNH Industrial N.V. (NYSE:CNHI)’s demerger of its trucks and commercial vehicles business in early January. We continue to hold CNH Industrial as we believe it holds an attractive valuation at its current price.”

8. Johnson Controls International plc (NYSE:JCI)

Number of Hedge Fund Holders: 33

Johnson Controls International plc (NYSE:JCI) manufactures HVAC equipment and electronics. The company has operations in the United States, Europe, the Asia Pacific, and international markets. The stock is one of the best manufacturing stocks to buy now and also pays dividends. As of October 7, Johnson Controls International plc (NYSE:JCI) is offering a forward dividend yield of 2.67% and has free cash flows of $670 million.

On July 15, Jefferies analyst Stephen Volkmann revised his price target on Johnson Controls International plc (NYSE:JCI) to $65 from $70 and reiterated a Buy rating on the shares. On July 18, Mizuho analyst Brett Linzey adjusted his price target on Johnson Controls International plc (NYSE:JCI) to $65 from $68 and maintained a Buy rating on the shares.

At the end of Q2 2022, 33 hedge funds were long Johnson Controls International plc (NYSE:JCI) and held stakes worth $603.5 million in the company. As of June 30, D E Shaw owns more than 2.9 million shares of Johnson Controls International plc (NYSE:JCI) and is the top shareholder in the company.

Here is what Aristotle Capital Management had to say about Johnson Controls International plc (NYSE:JCI) in its first-quarter 2022 investor letter:

“As investors since the fourth quarter of 2017, we have enjoyed a front-row view of the large transformation that has taken place at Johnson Controls. Once a multi-industrial corporation, the company successfully turned itself into a pure-play buildings solutions and technology provider. Catalysts we previously identified for Johnson Controls included synergies following its merger with Tyco International, which provides fire safety and building security products, as well as benefits from its separation of non-building-focused businesses, such as automotive seating and batteries. With all catalysts in sight now nearing completion, and Johnson Controls now a better business for it – with higher recurring revenues and lower capital intensity – we decided to exit our investment to help fund the purchases of Xcel Energy and Atmos Energy.”

7. Generac Holdings Inc. (NYSE:GNRC)

Number of Hedge Fund Holders: 34

Generac Holdings Inc. (NYSE:GNRC) manufactures and markets power generation equipment and energy storage systems worldwide. Generac Holdings Inc. (NYSE:GNRC) is exploring strategic M&A and is one of the best manufacturing stocks to buy now. On October 4, the company announced that it has acquired industrial IoT developer Blue Pillar. With this move, Generac Holdings Inc. (NYSE:GNRC) will be able to leverage IoT technology and offer smart power generation products.

Wall Street is bullish on Generac Holdings Inc. (NYSE:GNRC). This September, Jefferies analyst Saree Boroditsky started coverage of Generac Holdings Inc. (NYSE:GNRC) with a Hold rating and a $190 price target. On September 30, Cowen analyst Jeffrey Osborne took coverage of Generac Holdings Inc. (NYSE:GNRC) with a buy-side Outperform rating and a $229 price target.

At the end of the second quarter of 2022, 34 hedge funds held stakes in Generac Holdings Inc. (NYSE:GNRC) worth $372.8 million. This is compared to 33 positions in the previous quarter with stakes worth $383.2 million. As of June 30, Impax Asset Management owns roughly 0.84 million shares of Generac Holdings Inc. (NYSE:GNRC) and is the most prominent investor in the company.

6. LyondellBasell Industries N.V. (NYSE:LYB)

Number of Hedge Fund Holders: 37

LyondellBasell Industries N.V. (NYSE:LYB) is a leading manufacturer of plastics, chemicals, and fuels. At the end of the second quarter of 2022, LyondellBasell Industries N.V. (NYSE:LYB) was spotted on 37 hedge fund portfolios. These funds held collective stakes of $953.4 million. This is compared to 32 positions in Q1 2022 with stakes worth $744 million. The hedge fund sentiment for the stock is positive.

On September 13, Wells Fargo analyst Michael Sison revised his price target on LyondellBasell Industries N.V. (NYSE:LYB) to $100 from $115 and maintained a buy-side Overweight rating on the shares. This September, Deutsche Bank analyst David Begleiter adjusted his price target on LyondellBasell Industries N.V. (NYSE:LYB) to $85 from $92 and maintained a Hold rating on the shares.

On October 4, LyondellBasell Industries N.V. (NYSE:LYB) launched its new catalyst production plant at its manufacturing facility in Germany.

As of June 30, Eagle Capital Management is the top shareholder in LyondellBasell Industries N.V. (NYSE:LYB) and has stakes worth $358 million in the company. The investment covers 1.55% of the fund’s 13F portfolio.

In addition to Emerson Electric Co. (NYSE:EMR), Deere & Company (NYSE:DE), and Caterpillar Inc. (NYSE:CAT), LyondellBasell Industries N.V. (NYSE:LYB) is among the best manufacturing stocks that pay dividends.

Click to continue reading and see 5 Best Manufacturing Stocks To Invest In.

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Disclosure: None. 11 Best Manufacturing Stocks To Invest In is originally published on Insider Monkey.

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