The manufacturing industry is expected to continue evolving, focusing on technological integration, supply chain resilience, and sustainability. Given this backdrop, it could be wise to consider investing in fundamentally strong manufacturing stocks, Corning Incorporated (GLW), Watts Water Technologies, Inc. (WTS), and TE Connectivity plc (TEL).
Many businesses are incorporating advanced technologies into their manufacturing processes, leading to increased efficiency, cost reduction, and productivity improvements. This technological evolution significantly affects business performance compared to other smart manufacturing technologies, with generative AI or causal AI delivering the highest return on investment.
By 2031, the global manufacturing market will be $20.76 trillion, with a CAGR of 4.9%. As the manufacturing market evolves, investments in innovation, sustainability, and resilient supply chains are expected to be critical in driving global competitiveness and sustainable economic development.
Given these favorable industry trends, let’s look at the fundamentals of Industrial - Manufacturing stocks, beginning with the third choice.
Stock #3: Corning Incorporated (GLW)
GLW engages in display technologies, optical communications, environmental technologies, specialty materials, and life sciences businesses in the United States and internationally.
In terms of the trailing-12-month EBIT margin, GLW’s 10.57% is 94.7% higher than the 5.43% industry average. Likewise, its 20.86% trailing-12-month EBITDA margin is 97.5% higher than the 10.56% industry average.
For the fourth quarter of 2024, which ended on December 31, GLW’s net sales increased 17% year-over-year to $3.50 billion. Its non-GAAP core net income stood at $497 million, up 47% year-over-year, while its non-GAAP core earnings per share rose 46% from the prior year’s quarter to $0.54.
Analysts expect GLW’s revenue for the first quarter (ending March 2025) to increase 11.1% year-over-year to $3.62 billion. The company’s EPS for the same period is expected to grow 32.5% year-over-year to $0.50. Moreover, the company topped the consensus revenue estimates in all of the trailing four quarters.
The stock has surged 10.8% over the past month, closing the last trading session at $52.54.
GLW’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
GLW has an A grade for Momentum and Sentiment and a B for Growth. It is ranked #13 out of 36 stocks in the Industrial - Manufacturing industry. Click here to see the additional ratings for GLW (Value, Stability, and Quality).
Stock #2: Watts Water Technologies, Inc. (WTS)
WTS supplies products and solutions that manage and conserve the flow of fluids and energy into, through, and out of buildings in the commercial, industrial, and residential markets in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa.
In terms of the trailing-12-month EBIT margin, WTS’ 17.65% is 69.6% higher than the 10.41% industry average. Likewise, its 20.07% trailing-12-month EBITDA margin is 38.8% higher than the 14.46% industry average.
For the fourth quarter that ended December 31, 2024, WTS’ net sales were reported at $540.40 million. The company’s adjusted operating income rose 5% from the prior year’s quarter to $90.90 million. Its adjusted earnings per share increased 4% year-over-year to $2.05.
Street expects WTS’ revenue for the fiscal year (ending December 2025) to increase marginally year-over-year to $2.26 billion. Its EPS is expected to grow 3.1% year-over-year to $9.13. Moreover, the company topped the consensus revenue and EPS estimates in all of the trailing four quarters.
Shares of WTS have gained 6.5% over the past year to close the last trading session at $213.87.
WTS’ 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.
WTS has an A grade for Quality. It is ranked #4 in the same industry.
In addition to the POWR Ratings we’ve stated above, we also have WTS ratings for Momentum, Stability, Sentiment, Value, and Growth here.
Stock #1: TE Connectivity plc (TEL)
Based in Ballybrit, Ireland, TEL is a global industrial technology company that manufactures and sells connectivity and sensor solutions. The company operates through three segments: Transportation Solutions; Industrial Solutions; and Communications Solutions.
In terms of the trailing-12-month levered FCF margin, TEL’s 13.84% is 16.1% higher than the 11.93% industry average. Similarly, the stock’s 18.69% trailing-12-month EBIT margin is 244.2% higher than the 5.43% industry average.
During the first quarter that ended December 27, 2024, TEL posted a total group revenue of $3.84 billion, indicating a marginal growth from the prior-year quarter. Its adjusted EBITDA increased marginally year-over-year to $931 million, and the adjusted EPS came in at $1.95, which is up 6% year-over-year. Also, the company’s free cash flow amounted to $674 million, reflecting an increase of 18.2% year-over-year.
Street expects TEL’s revenue for the fiscal second quarter (ending March 2024) to increase marginally year-over-year to $3.97 billion. Its EPS for the same period is expected to register a 5.6% growth from the prior year, settling at $1.96. In addition, it surpassed the EPS in each of the trailing four quarters, which is promising.
Over the past six months, the stock has surged 5.3%, closing the last trading session at $152.77.
TEL’s POWR Ratings reflect its bright outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
TEL has a B grade for Stability, Sentiment, and Quality. It is ranked #3 in the same industry. Click here to see the additional ratings for TEL (Value, Momentum, and Growth).
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TEL shares were trading at $154.69 per share on Tuesday afternoon, up $1.92 (+1.26%). Year-to-date, TEL has gained 8.20%, versus a 4.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
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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