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I’ve been on a reading binge lately, old-school entrepreneurs building factories and churning out real, physical goods. Freedom’s Forge, Fly Fast... Sin Boldly, even an extremely cheesy novel called The Betsy.

Factories, steel, airplane components, railroads… There’s something exciting about the world of industrialist tycoons.

Despite what politicians say, the United States remains a manufacturing powerhouse. In fact, it’s still the world’s second-largest manufacturer by output. Products like steel and refrigerators are essential, unlike the 800th AI-powered customer service platform, yet they get surprisingly little attention on Wall Street.

With that in mind, here are three manufacturing and industrial stocks worth a closer look.

1. Rockwell Automation, Inc. ($ROK)

Founded in 1903, Rockwell Automation designs and builds industrial automation hardware: motor control devices, motion systems, and the software that powers robotic arms.

This is essentially a meta-play on manufacturing itself, and the stock is priced at a premium because of it.

Rockwell Automation currently trades at a price to earnings ratio of 34.24 while offering a 1.33% starting yield that is backed by a 5-year compound annual dividend growth rate of 5.18% and a safe payout ratio of 46.74%.

The company also delivered a 10-year average annual total return of 15.76%.

This is easily the most “mainstream” name on the list, frequently featured in manufacturing-focused articles and investment reports. Personally, I find the valuation too high and the dividend growth too slow. Still, plenty of investors love this stock due to its role as a critical supplier of high-tech factory infrastructure.

2. Illinois Tool Works Inc. ($ITW)

Illinois Tool Works produces everything from automotive fasteners and powertrain components to welding equipment and commercial kitchen appliances. Founded in 1902, it’s a Dividend King with 62 consecutive years of payout increases.

This company never seems to get much investor attention, but Illinois Tool Works still trades at a price to earnings ratio of 24.17.

The firm has a decent starting yield of 2.37%, backed by a 5-year compound annual dividend growth rate of 7.11% and a payout ratio of 59.29%. Illinois Tool Works has also delivered a 10-year average annual total return of 12.54%.

This isn’t a market-beater, and it’s arguably expensive relative to its long-term returns.

However, a 60+ year dividend growth streak is impressive, and the company continues to grow its payouts faster than inflation.

3. Nucor Corporation ($NUE)

Nucor Corporation is North America’s largest steel producer.

Originally founded in the 1950s as “Nuclear Consultants,” it’s another Dividend King, with 53 consecutive years of dividend increases.

Steel is not a sector that Wall Street cares about, so Nucor trades at a relatively low price to earnings ratio of 15.24.

This company is volatile, yet still consistently beats the market. In fact, Nucor has a 10-year average annual total return of 17.09%. The firm’s starting yield of 1.14% isn’t particularly high, though it is backed by a 5-year compound annual dividend growth rate of 6.57% that’s well-covered by the firm’s 28.41% payout ratio.

Nucor is up more than 77% over the past year, rebounding from a massive sell-off caused by trade war fears. This is a stock Warren Buffett's Berkshire Hathaway owns, and its an interesting example of a market-beating business in a sector that’s largely ignored and disliked.

Conclusion

Manufacturing stocks aren’t exactly cheap, but the sector is more interesting than it looks, especially given how many Dividend Kings it contains.

With U.S. manufacturing showing signs of resurgence, the Wall Street Journal recently ran a piece titled “America Is in the Middle of a Stealth Manufacturing Boom,” this could be a long-overlooked area that starts attracting attention again.

If you’re interested in companies that build tangible, essential goods, Rockwell Automation, Illinois Tool Works, and Nucor are all worth a closer look.

They’ve been around for decades, pay dividends, and sit at the core of real-world infrastructure.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.

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