Global Investing

CHAPTER 15Industrials

________________

The global industrials sector includes companies that provide goods and services tied to manufacturing and transportation and is perhaps the most diverse sector of the stock market. These companies produce a wide variety of goods including manufacturing equipment, aircraft, trucks, and building products. Services include building and maintaining roads, bridges, tunnels, and airports. Additionally, they operate shipping businesses that deliver goods to all corners of the globe and provide goods and services to support other businesses.

Data source: Bloomberg, as of March 18, 2022.

Industrial companies listed in this chapter are mature businesses with a marginally lower underlying growth rate compared to the market. However, they have offered competitive dividend yields and above-average dividend growth in recent years.

These companies tend to be capital intensive and are sensitive to the economic cycle and changes in economic growth. That said, companies that produce high-ticket items, such as heavy equipment, factory automation equipment, and machinery, do not usually experience a pickup in customer orders until business confidence improves and the economic cycle is well under way. On the other hand, industries such as commercial services (which includes hiring services) are likely to experience increased demand for their services ...