5 Best Hardware Stocks To Buy Now

In this article, we will discuss the 5 best hardware stocks to buy now. If you want to read our analysis of the hardware industry and explore similar stocks, you can go to 11 Best Hardware Stocks To Buy Now.

5. Tractor Supply Company (NASDAQ:TSCO)

Number of Hedge Fund Holders: 37

Tractor Supply Company (NASDAQ:TSCO) is a leading distributor of farming hardware, trucks, towing, and tool products. The company is committed to driving shareholder value. On November 2, Tractor Supply Company (NASDAQ:TSCO) declared a quarterly cash dividend of $0.92 per common share. The dividend was payable on December 6 to investors of record at the close of business on November 21. As of December 6, the stock is offering a forward dividend yield of 1.64% and has gained 7.97% over the past six months. Tractor Supply Company (NASDAQ:TSCO) is placed high among the best hardware stocks to buy now.

Analysts are bullish on Tractor Supply Company (NASDAQ:TSCO). On December 5, Wells Fargo analyst Zachary Fadem raised his price target on Tractor Supply Company (NASDAQ:TSCO) to $255 from $250 and maintained an Overweight rating on the shares.

At the close of Q3 2022, 37 hedge funds were long Tractor Supply Company (NASDAQ:TSCO) and disclosed positions worth $751 million in the company. Of those, Select Equity Group was the largest investor in the company and disclosed a position worth $412.9 million.

4. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 43

On October 27, Caterpillar Inc. (NYSE:CAT) posted market-beating earnings for the third quarter of fiscal 2022. The company reported an EPS of 3.95 and outperformed Wall Street consensus by $0.78. The company’s revenue for the quarter grew by 20.95% year over year and amounted to $14.99 billion, ahead of revenue estimates by $619.93 million. As of December 6, Caterpillar Inc. (NYSE:CAT) has gained 10.29% year to date and is offering a forward dividend yield of 2.10%.

Wall Street sees material upside to Caterpillar Inc. (NYSE:CAT). On October 31, Citi analyst Timothy Thein raised his price target on Caterpillar Inc. (NYSE:CAT) to $235 from $180 and maintained a Neutral rating on the shares.

At the end of Q3 2022, 43 hedge funds held stakes in Caterpillar Inc. (NYSE:CAT). The total value of these stakes amounted to $2.84 billion. As of September 30, Bill & Melinda Gates Foundation Trust is the top shareholder in the company and has a stake worth $1.20 billion.

Here is what Diamond Hill Capital had to say about Caterpillar Inc. (NYSE:CAT) in its first-quarter 2022 investor letter:

“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”

3. Lowe’s Companies, Inc. (NYSE:LOW)

Number of Hedge Fund Holders: 61

Lowe’s Companies, Inc. (NYSE:LOW) is a leading American home improvement retailer that provides a variety of products for construction, maintenance, repair, remodeling, and decorating. The stock is one of the best hardware stocks to buy now, and is offering a forward dividend yield of 1.95% to investors, as of December 6. Lowe’s Companies, Inc. (NYSE:LOW) has a strong cash position and has free cash flows of over $7.38 billion.

On December 6, Bernstein analyst Dean Rosenblum took coverage of Lowe’s Companies, Inc. (NYSE:LOW) with a Market Perform rating and a $237 price target.

At the close of Q3 2022, 61 hedge funds were bullish on Lowe’s Companies, Inc. (NYSE:LOW) and disclosed positions of $5.35 billion in the company. This is compared to 53 positions in the previous quarter with stakes worth $4.98 billion. The hedge fund sentiment for the stock is positive. As of September 30, Pershing Square was the largest investor in the company and held stakes worth $1.94 billion.

Here is what Baron Funds had to say about Lowe’s Companies, Inc. (NYSE:LOW) in its third-quarter 2022 investor letter:

“Lowe’s Companies, Inc. (NYSE:LOW) is the second-largest home improvement center in the U.S. The company has several competitive advantages including scale, distribution efficiencies, interconnected retail through stores/internet, excellent management, and a strong balance sheet. The company is valued at only 14 times estimated earnings per share versus its long-term average P/E multiple of approximately 18 times estimated earnings per share.

The shares of Lowe’s Companies, Inc. increased 7% in the most recent quarter following better better-than-expected quarterly business results. Lowe’s is the second largest home improvement center in the U.S. The company has several competitive advantages including scale, distribution efficiencies, interconnected retail through stores/internet, excellent management, and a strong balance sheet. We believe the shares are attractively valued at only 14 times estimated earnings per share versus a long-term average P/E multiple of approximately 18 times estimated earnings per share.”

2. The Sherwin-Williams Company (NYSE:SHW)

Number of Hedge Fund Holders: 63

The Sherwin-Williams Company (NYSE:SHW) develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers across the globe. The stock is one of the best hardware stocks to buy now. The company is a clear leader in its industry and has a strong cash position. According to the company’s balance sheet, The Sherwin-Williams Company (NYSE:SHW) has free cash flows of $938.2 million.

On October 27, BMO Capital analyst John McNulty raised his price target on The Sherwin-Williams Company (NYSE:SHW) to $251 from $244 and reiterated a Market Perform rating on the shares. On December 2, JPMorgan analyst Jeffrey Zekauskas raised his price target on The Sherwin-Williams Company (NYSE:SHW) to $260 from $250 and maintained an Overweight rating on the shares.

At the end of third quarter of 2022, 63 hedge funds held stakes in The Sherwin-Williams Company (NYSE:SHW) worth $2.83 billion. This is compared to 52 positions a quarter ago with stakes worth $1.86 billion. The hedge fund sentiment for the stock is positive. As of September 30, D1 Capital Partners is the largest shareholder in the company and has a position worth $409.2 million.

Here is what ClearBridge Investments had to say about The Sherwin-Williams Company (NYSE:SHW) in its third-quarter 2022 investor letter:

“The third strategy is buying growth companies with idiosyncratic or stock-specific catalysts unrelated to the direction of the market like The Sherwin-Williams Company (NYSE:SHW). The stock is an example of a company we categorize in our cyclical bucket that should experience a step change in earnings over the medium to long term with solid execution and its ability to pass through price increases. While relative performance has been challenged by binary decisions around a handful of mega cap technology stocks, we’re entering a lower-growth period in which we’ve historically delivered strong relative results from our balanced approach.”

1. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 89

The Home Depot, Inc. (NYSE:HD) is among the largest home improvement retailers in the world and is placed among the top five hardware stocks to buy now. The Home Depot, Inc. (NYSE:HD) is a profitable company with a healthy balance sheet and abundant cash resources. According to the company’s balance sheet, The Home Depot, Inc. (NYSE:HD) has a trailing twelve-month operating margin of 15.50% and free cash flows of over $10 billion.

On November 16, JPMorgan analyst Christopher Horvers raised his price target on The Home Depot, Inc. (NYSE:HD) to $328 from $300 and maintained an Overweight rating on the shares.

At the close of the third quarter of 2022, 89 hedge funds were eager on The Home Depot, Inc. (NYSE:HD) and disclosed stakes of $5.61 billion in the company. This is compared to 80 positions in the previous quarter with stakes worth $5.35 billion. The hedge fund sentiment for the stock is positive. As of September 30, Fisher Asset Management was the top investor in the company and held stakes worth $2.25 billion.

Here is what Diamond Hill Capital had to say about The Home Depot, Inc. (NYSE:HD) in its third-quarter 2022 investor letter:

“The Home Depot, Inc. (NYSE:HD) shares were more resilient in Q3 as the company continues to perform well and reiterated guidance despite increasing market concerns regarding general inflationary pressures and the impact rising mortgage rates may have on the housing market. We view the longterm prospects and multi-year fundamental outlook as unchanged. Home improvement through repair and remodel is likely to be one of more resilient housing-related industries given the relative attractiveness for consumers to renovate existing homes rather than reset their current low fixed mortgage rate to higher rates that we’re seeing today.”

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