Emerson Electric Co. (EMR), W.W. Grainger, Inc. (GWW), WESCO International, Inc. (WCC): Why Investing in Electrical Equipment Companies Is a Good Idea

Expanding applications

This industry, while heavy on acquisitions, is light on R&D. Companies do occasionally aim to bring their existing technologies to new product markets with favorable outcomes.

For example, NCR Corporation (NYSE:NCR), a manufacturer of automated-teller machines and retail-point-of-sales systems, has in recent years built a presence in the Hospitality (hotels, gaming) industry. Indeed, the hospitality segment was its fastest-growing business during the June quarter.

The company also sees opportunity for kiosk technologies in additional markets, such as travel, restaurants, cinema, DVD rentals, and others. These offerings now comprise an emerging industry segment that ought to be a contributor to profit gains in subsequent periods.

NCR Corporation (NYSE:NCR)’s overall performance has been excellent of late and earnings are on track to climb solidly this year. Should investments related to further end market expansion bear fruit, NCR could be a worthwhile long-term holding.

Finding the best selection

All of the factors discussed concerning electrical equipment stocks can probably be considered in relation to almost any industry participant to some extent. If a company is benefiting from two or three of these conditions, it may well be a good investment.

Those with a conservative bent of mind would likely be best served with an investment in Emerson Electric Co. (NYSE:EMR) or W.W. Grainger, Inc. (NYSE:GWW), two of the lower-beta choices among these four stocks. WESCO International, Inc. (NYSE:WCC) is best-suited for those looking for a firm aggressively expanding in growing markets (see “This Electrical Product Maker Is Well Positioned“). Finally, NCR holds appeal to those anticipating rising spending by banks and other industries on self-service technologies.

The article Why Investing in Electrical Equipment Companies Is a Good Idea originally appeared on Fool.com and is written by Damon Churchwell.

Damon Churchwell has no position in any stocks mentioned. The Motley Fool recommends Emerson Electric Co (NYSE:EMR).

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