Two Manufacturing Stocks for the Long Run
Manufacturing stocks have had a rough three months as concerns over a slowdown in worldwide growth have reduced earnings estimates for the sector and hit these stocks hard.
However, U.S. manufacturing has gone through a renaissance over the past decade. During this time span, U.S. manufacturers have reduced their cost structure faster than manufacturers in the rest of the world. Decreasing unionization has led to more flexibility and increasing productivity. Add in some of the lowest natural-gas costs in the world and an overall weaker dollar, and it adds up to a very powerful long-term narrative.
Several manufacturing stocks are currently selling at bargain prices and paying a nice dividend to boot. Here are two I like here.
Dover(DOV) manufactures a range of specialized products and components. The company operates in four segments: communication technologies, energy, engineered systems and printing and identification.
Here are four reasons Dover is a solid pick at $54 a share:
- It has an A-rated balance sheet and pays a dividend of 2.3%. It has raised its dividend payout at a 10% annual clip over the past half-decade.
Timken(TKR) manufactures anti-friction bearings and assemblies, alloy steels and mechanical power transmission systems.
Here are four reasons Timken is a long-term bargain at under $38 a share:
- After its recent selloff, insiders have increased their purchases. Two insiders bought almost $300,000 in new shares in late July.