Industrial stocks are increasingly positioned for gains due to the increasing adoption of automation and smart technologies and investments in infrastructure. Given this backdrop, it could be wise to watch fundamentally strong industrial stocks, Honeywell International Inc. (HON), Southern Copper Corporation (SCCO), and Corning Incorporated (GLW), with strong earnings growth.

For example, the industrial machinery market is anticipated to register a CAGR of 7.5% by 2032 due to the increasing adoption of automation and smart technologies, which significantly enhance productivity and efficiency. Key sectors fueling this growth include material handling and robotics, which are integral to modern industrial processes.

Moreover, major infrastructure spending programs, like the U.S. Infrastructure Investment and Jobs Act and the Inflation Reduction Act, are driving industrial expansion. These initiatives demand substantial investments in construction machinery, transportation networks, and manufacturing.

Given these favorable industry trends, let’s look at the fundamentals of the top 3 industrial stocks.

Honeywell International Inc. (HON)

HON engages in aerospace technologies, building automation, energy and sustainable solutions, and industrial automation businesses globally. It operates through four segments: Aerospace; Honeywell Building Technologies; Performance Materials and Technologies; and Safety and Productivity Solutions.

On November 22, HON announced the sale of its Personal Protective Equipment (PPE) business to Protective Industrial Products, Inc. (PIP), an Odyssey Investment Partners portfolio company, for $1.325 billion in cash. This transaction will allow HON to simplify and optimize its businesses. Also, it should position HON to continue creating long-term value for shareholders.

For the third quarter of 2024, which ended on September 30, HON’s net sales increased 5.6% year-over-year to $9.73 billion, while its Aerospace Technologies segment’s net sales grew 11.8% from the same period last year to $3.91 billion.

Its attributable net income stood at $1.41 billion, while its adjusted EPS for the quarter increased 8.4% year-over-year to $2.58. Also, the company’s free cash flow amounted to $1.72 billion, representing an increase of 10.1% from the last year.

Street expects HON’s revenue and EPS for the fiscal fourth quarter (ending December 2024) to increase 8.5% and 6.9% year-over-year to $10.24 billion and $2.78, respectively. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters, which is excellent.

The stock has gained 18.4% over the past year to close the last trading session at $229.95.

HON’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

HON has a B grade for Growth, Momentum, and Stability. It is ranked #27 out of 79 stocks in the A-rated Industrial - Machinery industry. Click here to access the other HON ratings for Value, Sentiment, and Quality.

Southern Copper Corporation (SCCO)

SCCO is an integrated producer of copper and valuable by-products. It operates the mining, exploring, smelting, and refining facilities in Peru, Mexico, Argentina, Chile, and Ecuador. Its operating segments include Peruvian operations; Mexican open-pit operations; and Mexican underground mining operations.

The stock’s trailing-12-month EBITDA margin of 54.42% is 230.1% higher than the industry average of 16.49%. Similarly, its 27.67% trailing-12-month net income margin is 449.1% above the industry average of 5.04%.

SCCO’s sales for the third quarter (ended September 30, 2024) increased 17% year-over-year to $2.93 billion. The company reported an operating income of $1.45 billion, indicating a 35.6% growth from the prior year’s quarter. SCCO’s adjusted EBITDA came in at $1.68 billion, up 30.5% year-over-year, while its net income per share grew 43.8% from the prior-year quarter to $1.15.

The consensus revenue estimate of $2.98 billion for the fiscal fourth quarter (ending December 2024) represents a 29.9% increase year-over-year. The consensus EPS estimate of $1.17 for the same quarter indicates a 106.5% improvement year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimate in three of the trailing four quarters.

The stock has gained 42.5% over the past year and 26.5% over the past nine months to close the last trading session at $100.05.

SCCO’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.

SCCO has an A grade for Quality and a B for Growth and Stability. It is ranked #8 out of 29 stocks in the Industrial - Metals industry.

In addition to the POWR Ratings we’ve stated above, we also have SCCO ratings for Value, Sentiment, and Momentum. Get all SCCO ratings here.

Corning Incorporated (GLW)

GLW engages in providing display technologies, optical communications, environmental technologies, specialty materials, and life sciences businesses in the United States and internationally.

On October 28, AT&T Inc. (T) and GLW together signed a multi-year purchase agreement. Under this agreement, GLW will provide next-generation fiber, cable, and connectivity solutions to support the expansion of AT&T’s fiber network and help bring high-speed internet.

The stock’s trailing-12-month EBIT margin of 9.89% is 90% higher than the industry average of 5.20%. Similarly, its 3.90% trailing-12-month ROTC is 25.6% above the industry average of 3.10%.

For the third quarter of 2024, which ended on September 30, GLW’s net sales increased 6.9% year-over-year to $3.39 billion. The company’s operating income for the quarter amounted to $302 million, representing an increase of 28% year-over-year.

Its core net income stood at $465 million, up 20.5% year-over-year, while its core earnings per share rose 20% from the prior year’s quarter to $0.54. Also, GLW’s adjusted free cash flow grew 18.7% from the year-ago value to $553 million.

The consensus revenue estimate of $3.76 billion for the fourth quarter (ending December 2024) represents a 14.8% increase year-over-year. The consensus EPS estimate of $0.56 for the same quarter indicates a 42.5% improvement year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus revenue estimates in each of the trailing four quarters.

Over the past nine months, the stock has surged 51.7%, closing the last trading session at $49.24.

GLW’s POWR Ratings reflect its bright outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. 

GLW has an A grade for Growth and a B for Momentum and Sentiment. It is ranked #13 out of 35 stocks in the Industrial - Manufacturing industry. Click here to see the additional ratings for GLW (Stability, Value, and Quality).

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HON shares were trading at $226.40 per share on Tuesday afternoon, down $3.55 (-1.54%). Year-to-date, HON has gained 10.26%, versus a 28.25% rise in the benchmark S&P 500 index during the same period.

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.

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