12 Best Manufacturing Stocks To Buy Now

Published June 27, 2023 at 5:39 am EDT Updated August 31, 2026 at 12:00 pm EDT

In this article, we discuss 12 best manufacturing stocks to buy now.

In 2022, the manufacturing industry remained resilient, and while this year also experienced record demand and production levels, the short-term outlook is not rosy. This is due to the unstable macro environment and uncharted inflation rates, which are destroying growth pace in the sector. Complex issues persist in the manufacturing sector, including supply chain bottlenecks, inventory and logistics backlogs, skyrocketing costs, and cybersecurity breaches.

According to Deloitte, there are five crucial trends that will shape the global manufacturing industry in 2023. First, ongoing investments in complex manufacturing technologies will increase productivity and resilience in the manufacturing sector. Second, manufacturers are working hard to address the high workforce turnover and looking to keep their employees onboard with improved talent retention methods. Moreover, manufacturers are alleviating supply chain constraints by shifting to just-in-case inventory strategies and sourcing raw materials locally. Some manufacturers are even creating in-house raw materials to mitigate unforeseen shortages. In addition to that, manufacturers are digitally transforming their plants and factories by making their operations smart or creating a metaverse platform for their products and services. Manufacturers are also working hard to keep their environmental, social, and governance commitments. Another emerging trend in the manufacturing sector is Supply Chain 4.0, which refers to supply chain management that is led by trailblazing technologies such as the Internet of Things (IoT), artificial intelligence (AI), robotics, and big data analytics. This helps revolutionize logistics, supply chains, and production by optimizing costs, increasing efficiency, promoting innovation, and staying ahead of the competition.

Don’t Miss: Top 20 Manufacturing Countries in the World

Jay Timmons, President and CEO of The National Association of Manufacturers, described the manufacturing outlook for this year and commented on January 5, 2023:

“The majority of manufacturers expect a recession this year. Congress failed to act on essential tax reforms, which complicates investment, increases inflationary pressures and could stifle economic growth. Much needed permitting reforms and provisions to strengthen our ability to conduct research and development, buy machinery and finance job-creating investments — which we need to promote growth within the sector — were left on the cutting room floor last year. Those reforms, combined with manufacturers’ ongoing efforts to inspire, educate and empower the future workforce, are critical to our competitiveness.”

According to Tesla, Inc. (NASDAQ:TSLA)’s Elon Musk, while it is great how many entrepreneurs are entering the tech and software industry, he believes the heavy industry presents significant opportunities. Musk recently stated that there is a scarcity of skilled workforce in the manufacturing and heavy industries. In this article, we discuss some of the best manufacturing stocks to buy now, including Deere & Company (NYSE:DE), Honeywell International Inc. (NASDAQ:HON), and Caterpillar Inc. (NYSE:CAT). Investors can also check out 20 Largest Manufacturing Companies in the World and Top Manufacturing Companies in the US.

Our Methodology

We selected the following manufacturing stocks based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.

Photo by Carl Nenzen Loven on Unsplash

Best Manufacturing Stocks To Buy Now

12. Illinois Tool Works Inc. (NYSE:ITW)

Number of Hedge Fund Holders: 32

Illinois Tool Works Inc. (NYSE:ITW) manufactures and distributes industrial products and equipment worldwide, operating through Automotive OEM, Food Equipment, Test & Measurement and Electronics, Welding, Polymers & Fluids, Construction Products, and Specialty Products segments. On May 12, Illinois Tool Works Inc. declared a $1.31 per share quarterly dividend, in line with previous. The dividend is payable on July 13, to shareholders of record on June 30.

According to Insider Monkey’s first quarter database, 32 hedge funds were bullish on Illinois Tool Works Inc., compared to 34 funds in the earlier quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with 367,963 shares worth $89.5 million.

In addition to Deere & Company, Honeywell International Inc., and Caterpillar Inc., Illinois Tool Works Inc. is one of the best manufacturing stocks to watch.

11. AMETEK, Inc. (NYSE:AME)

Number of Hedge Fund Holders: 36

AMETEK, Inc. (NYSE:AME) manufactures and sells electronic instruments and electromechanical devices. It is one of the best manufacturing stocks to invest in. On May 25, AMETEK, Inc. declared a $0.25 per share quarterly dividend, in line with previous. The dividend is payable on June 30, to shareholders of record on June 12.

On May 2, AMETEK, Inc. reported a Q1 non-GAAP EPS of $1.49 and a revenue of $1.59 billion, outperforming Wall Street estimates by $0.08 and $50 million, respectively.

According to Insider Monkey’s first quarter database, 36 hedge funds were bullish on AMETEK, Inc., compared to 39 funds in the preceding quarter. Dmitry Balyasny’s Balyasny Asset Management is the largest position holder in the company, with over 1 million shares worth $148.15 million.

Aristotle Core Equity Strategy made the following comment about AMETEK, Inc. in its Q4 2022 investor letter:

“AMETEK, Inc. contributed to performance in the fourth quarter following a better-than-expected third quarter earnings report and an increase in full year guidance. The company has low balance sheet leverage and management appeared confident in its ability to source acquisitions. Management believes that the company’s recession risk is lower than in previous economic cycles due to the remixing of the portfolio to less cyclical end markets.”

10. Xylem Inc. (NYSE:XYL)

Number of Hedge Fund Holders: 37

Xylem Inc. (NYSE:XYL) designs, manufactures, and services engineered products and solutions for water and wastewater applications worldwide. It is one of the best manufacturing stocks to invest in. On May 18, Xylem Inc. declared a $0.33 per share quarterly dividend, in line with previous. The dividend is payable on June 28, to shareholders of record on May 30.

According to Insider Monkey’s first quarter database, 37 hedge funds were bullish on Xylem Inc., up from 21 funds in the prior quarter. Ian Simm’s Impax Asset Management is the biggest stakeholder of the company, with 1.20 million shares worth $126.5 million.

Conestoga Mid Cap Strategy made the following comment about Xylem Inc. in its Q1 2023 investor letter:

“Xylem Inc.: XYL is a leading global water technology company. The company designs, manufactures, and services highly engineered solutions sold into the Water Utility sector, Industrial market, and Commercial market. Although XYL reported a very strong Q4 with organic growth up 20%, they also announced a very large acquisition of Evoqua Water Technologies (AQUA), which Conestoga owns in the small cap strategy. The street is concerned that XYL is paying too much for AQUA and, therefore, the stock corrected.”

9. Cummins Inc. (NYSE:CMI)

Number of Hedge Fund Holders: 38

Cummins Inc. (NYSE:CMI) was founded in 1919 and is headquartered in Columbus, Indiana. The company designs, manufactures, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. On May 2, Cummins Inc. reported a Q1 GAAP EPS of $5.55 and a revenue of $8.45 billion, outperforming Wall Street estimates by $0.77 and $320 million, respectively. The company also distributed a $1.57 per share quarterly dividend on June 1.

According to Insider Monkey’s first quarter database, 38 hedge funds were bullish on Cummins Inc., compared to 33 funds in the earlier quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company, with 2.05 million shares worth $491.4 million.

8. Johnson Controls International plc (NYSE:JCI)

Number of Hedge Fund Holders: 41

Johnson Controls International plc (NYSE:JCI) specializes in engineering, manufacturing, commissioning, and retrofitting building products and systems, operating through Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia Pacific, and Global Products segments. On June 7, Johnson Controls International plc (NYSE:JCI) declared a $0.37 per share quarterly dividend, a 2.8% increase from the prior dividend of $0.36. The dividend is payable on July 14, to shareholders of record on June 20.

According to Insider Monkey’s first quarter database, 41 hedge funds were long Johnson Controls International plc (NYSE:JCI), compared to 45 funds in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the largest stakeholder of the company, with 4.4 million shares worth $264.4 million.

ClearBridge Aggressive Growth Strategy made the following comment about Johnson Controls International plc (NYSE:JCI) in its Q4 2022 investor letter:

“On an individual stock basis, positions in Broadcom, Comcast, Johnson Controls International plc (NYSE:JCI), Madison Square Garden Sports and Twitter were the leading contributors to absolute returns during the period. HVAC and building services provider Johnson Controls, meanwhile, saw a normalization of supply chain and semiconductor shortages lead to better operating results and subsequent strong performance.”

7. Emerson Electric Co. (NYSE:EMR)

Number of Hedge Fund Holders: 47

Emerson Electric Co. (NYSE:EMR) manufactures and distributes process control systems, climate technologies, power technologies, electric motors, storage systems, and professional tools for industrial, commercial, and consumer markets. On May 3, Emerson Electric Co. reported a Q2 non-GAAP EPS of $1.09 and a revenue of $3.76 billion, outperforming Wall Street estimates by $0.10 and $110 million, respectively.

According to Insider Monkey’s first quarter database, 47 hedge funds were bullish on Emerson Electric Co., compared to 32 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 4.26 million shares worth $371.3 million.

6. Parker-Hannifin Corporation (NYSE:PH)

Number of Hedge Fund Holders: 49

Parker-Hannifin Corporation (NYSE:PH) manufactures and commercializes motion and control technologies and systems for mobile, industrial, and aerospace sectors globally. On May 4, Parker-Hannifin Corporation reported a Q1 non-GAAP EPS of $5.93 and a revenue of $5.06 billion, topping Wall Street estimates by $0.92 and $270 million, respectively. Revenue for the period increased 23.7% on a year-over-year basis.

According to Insider Monkey’s first quarter database, 49 hedge funds were bullish on Parker-Hannifin Corporation, compared to 47 funds in the last quarter. Harris Associates is the largest stakeholder of the company, with 2.65 million shares worth $892.4 million.

Like Deere & Company, Honeywell International Inc., and Caterpillar Inc., smart investors are piling into Parker-Hannifin Corporation for exposure to the manufacturing sector.

Here is what Stewart Asset Management has to say about Parker-Hannifin Corporation in its Q3 2022 investor letter:

“We also need to point out one global consequence of the rapid rise in interest rates: an irrepressibly strong dollar. This hurts the reported earnings of U.S. companies who sell their goods and services overseas. Foreign currency earnings translate into fewer dollars and thus lower earnings. Most of the companies in your portfolios gain a notable amount of earnings from their international operations. While the strength or weakness of a currency doesn’t change the quality of a business or its longer-term earnings power, it can change the reported earnings of a company over short periods of time. It is difficult to forecast this effect accurately because many of our companies manufacture where they sell, which to some extent dulls the sharp negative effect of a surging dollar. Others sell goods that are priced in dollars such as Parker-Hannifin’s aerospace products.”

5. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 52

Caterpillar Inc. is the largest construction equipment manufacturer in the world. It is one of the best manufacturing stocks to buy. On June 14, Caterpillar Inc. declared a $1.30 per share quarterly dividend, an 8.3% increase from its prior dividend of $1.20. The dividend is payable on August 18, to shareholders of record on July 20.

According to Insider Monkey’s first quarter database, 52 hedge funds were bullish on Caterpillar Inc., compared to 50 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the biggest stakeholder of the company, with 7.35 million shares worth $1.68 billion.

Diamond Hill Large Cap Strategy made the following comment about Caterpillar Inc. in its Q4 2022 investor letter:

“In the case of Caterpillar Inc., the company reported a better-than-expected Q3 as demand in mining, non-residential construction and energy remained healthy through the year even as recession fears grew. Caterpillar showed strong pricing power and operating efficiency in the face of supply chain constraints and labor shortages, which in turn contributed to better-than-expected share price performance.”

4. The Boeing Company (NYSE:BA)

Number of Hedge Fund Holders: 52

The Boeing Company (NYSE:BA) designs, manufactures, and services commercial jetliners, military aircraft, satellites, missile defense, and human space flight and launch systems worldwide. The Boeing Company released its demand for commercial aircraft and services for the next 20 years on June 19, noting that 42,595 new commercial planes will be demanded by 2042 due to rising passenger traffic and airlines replacing their fleets with latest, fuel-efficient planes. The Boeing Company is one of the best manufacturing stocks to invest in.

According to Insider Monkey’s first quarter database, 52 hedge funds were bullish on The Boeing Company, compared to 53 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a prominent stakeholder of the company, with 1.7 million shares worth $368.7 million.

Jackson Square Partners made the following comment about The Boeing Company in its Q3 2022 investor letter:

“For The Boeing Company–in short, we believe the worst of Boeing’s idiosyncratic issues are behind it, the airframe duopoly remains as protected as ever, and at current prices (where we’ve been adding), the stock is trading around ~6x FCF on 2025E. Current airframe production is running materially below expected travel demand over the next 5-10 years, creating a structural supply/demand imbalance that we believe will drive a decade of strong growth in civil aerospace from here. In our 2Q’22 correspondence, we described the attributes of our ideal growth ballast and said we hoped to convert another in the coming months – we believe Boeing checks all those boxes.”

3. Honeywell International Inc. (NASDAQ:HON)

Number of Hedge Fund Holders: 58

Honeywell International Inc. is a diversified technology and manufacturing company that operates through Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions segments. It is one of the top manufacturing stocks to buy. On April 27, Honeywell International Inc. reported a Q1 non-GAAP EPS of $2.07 and a revenue of $8.86 billion, outperforming Wall Street estimates by $0.15 and $360 million, respectively.

According to Insider Monkey’s first quarter database, 58 hedge funds were long Honeywell International Inc., compared to 44 funds in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is a significant position holder in the company, with 1.3 million shares worth $254.7 million.

Here is what ClearBridge Investments has to say about Honeywell International Inc. in its Q1 2021 investor letter:

“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included industrials, Honeywell also lagged in the quarter after previously generating strong returns over extended periods.”

2. General Electric Company (NYSE:GE)

Number of Hedge Fund Holders: 59

General Electric Company (NYSE:GE) is an American multinational conglomerate that manufactures and commercializes gas and steam turbines, commercial and military aircraft engines, integrated engine components, electric power and mechanical aircraft systems, among others. It is one of the premier manufacturing stocks to invest in. On April 25, General Electric Company reported a Q1 non-GAAP EPS of $0.27 and a revenue of $14.5 billion, outperforming Wall Street estimates by $0.13 and $1.04 billion, respectively.

According to Insider Monkey’s first quarter database, 59 hedge funds were bullish on General Electric Company, and Chris Hohn’s TCI Fund Management is the largest stakeholder of the firm, with 26.1 million shares worth $2.5 billion.

Vulcan Value Partners made the following comment about General Electric Company in its Q1 2023 investor letter:

“General Electric Company was a material contributor during the quarter. With the successful spin-off of GE HealthCare in early January, the company operates in two major markets: GE Aerospace and GE Vernova. GE Aerospace powers three out of every four commercial flights. GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. The company’s service activities, which are higher margin and more resilient, represent approximately 60% of revenue and 85% of its backlog. The company reported strong fourth quarter 2022 results and management’s 2023 outlook is positive.”

1. Deere & Company (NYSE:DE)

Number of Hedge Fund Holders: 65

Deere & Company manufactures and distributes different equipment worldwide, operating through Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services segments. Deere & Company is one of the best manufacturing stocks to watch. On May 31, the company declared a $1.25 per share quarterly dividend, in line with previous. The dividend is payable on August 8, to shareholders of record on June 30.

According to Insider Monkey’s first quarter database, 65 hedge funds were bullish on Deere & Company, compared to 63 funds in the earlier quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with a position worth $1.6 billion.

ClearBridge Large Cap Value Strategy made the following comment about Deere & Company in its Q4 2022 investor letter:

“Our industrials holdings produced robust absolute returns for the quarter. While the ISM Manufacturing Index fell in November to contractionary levels, our industrial holdings have largely been able to maintain earnings due to strong competitive positions, historically large backlogs and company-specific drivers. For example, Deere & Company continues to benefit from a strong upgrade cycle as record farmers’ income is driving broad and rapid adoption of the company’s precision agricultural equipment.”

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