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Industrial stock trading is a middle-of-the-road type investment. Growth traders tend to ignore them and position investors often use these stocks as core investments. However, industrial stocks can make a solid addition to almost any investor’s portfolio.
Industrial stocks generally have more growth potential than defensive stocks and less risk than growth stocks. However, industrial stock investors are not immune to risks. You can reduce the risks by trading among the top industrial stocks. Here is a list of 5 top industrial stocks.
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Overview: Industry Stocks
Technology and innovation are constantly changing the world around us and the way we do things. At the same time, we still build and travel by proven means — with heavy machinery and transport goods by air or ground. For this reason, industrial stocks have the reputation of being reasonably predictable and reliable. The companies in this sector are in industries such as manufacturing, transportation, construction and raw materials.
Most industrial companies are cyclical — they rely on the economy for success. Cyclical stock prices follow the economic cycle, better known as the business cycle. Cyclical revenue volume goes up during high business cycles and levels off during low cycles. In contrast, non-cyclical revenue volume stays fairly constant. An example of a noncyclical company is the maker of Heinz Ketchup.
Best Online Brokers for Industrials Stock
All investments have risks. Full-service online brokers can provide the material and tools you need to make more informed industrial stock trades. Take a look at these top online brokers.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Over 8,000 different stocks that can be sold short
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- No chat support
E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.
- Active traders
- Derivatives traders
- Retirement savers
- Sophisticated trading platforms
- Wide range of tradable assets
- Exceptional customer service
- Limited currency trading
- Higher margin rates than competitors
- No paper trading on its standard platform
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
- Price earnings growth valuations
- Easily evaluate investment opportunities
CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.
- Intermediate to Advanced traders
- High-volume traders
- Momentum traders
- Short sellers
- Unrivaled access to short inventory
- Flexible order routing for improved executions
- Discounts for active traders
- Advanced platform with fast executions
- Reliable customer service
- Not designed for beginner or low-volume traders
Features to Look For in Industrial Stock
- Earnings per share: An industrial stock’s earning per share (EPS) reveals how well the business functions financially and operationally. This ratio defines the amount of money owed to stockholders after subtracting all expenses and taxes. You can calculate a company’s EPS by subtracting the preferred dividend from the net income. Then, you divide the remainder by the number of shares outstanding. A company’s website normally has a link to its annual EPS in the 4th quarter income report.
- Consistency: An industrial stock should be relatively stable. The company’s revenue volume should follow the S&P 500 very closely. Its net income history can give you an indication of the firm’s consistency. Plus, an increase in operating profits is a sign of sound management.
- Diversity: Industrial companies usually have 4 to 5 income streams from various submarkets within their field. For instance, Honeywell generates revenue from aerospace, building technology, performance materials and safety.
Deciding on Your Industrial Stock Choices
It takes a great deal of adaptability and fortitude to be a leader in the industrial industry. Year after year, these 5 industrial companies have used their core competencies to continue to be leaders of the pack. If you’re looking for an industrial stock that consistently tracks the market, these industrial stocks are good examples.