The Trump administration’s efforts to re-shore domestic manufacturing have been slow so far, as the manufacturing sector has lost jobs rather than build up its base in recent months.
Besides the challenges of the tariff landscape, another major hurdle for the manufacturing space is the labor market, with some analysts arguing that wages are too low to incentivize a return to domestic manufacturing of days gone by.
It might seem that companies that can lower manufacturing costs could raise wages and be in an advantageous position. Fortunately, there are many ways to do this, including new AI applications or the innovative integration of automation.
The companies below are all operating at the forefront of this crossover between the industrial and tech sectors.
Undervalued Industrial Innovator With Strong Buy Ratings, $1B Buyback, and Dividend Growth
IDEX Corp. NYSE: IEX builds and distributes fluidics and measurement systems and related tools for a wide range of industries, including original equipment manufacturers. Its sensors and similar offerings allow manufacturing enterprises to improve safety and efficiency while reducing costs.
Even better, the company has managed to successfully contain its own expenses, saving $14 million thanks to cost containment and platform optimization in the second quarter.
Combine these efforts with IDEX’s recently announced increase to its share repurchase program—making total repurchase capacity $1 billion—and its 124th consecutive quarterly cash dividend. IDEX becomes an attractive name for many investors. The company’s freed-up cash will enable it to engage in strategic, bolt-on acquisitions to help grow its operations and revenue.
With IEX shares down by more than 21% year-to-date (YTD), the stock’s value proposition is increasing. IDEX’s P/E ratio of 26.2 is close to a five-year low, and analysts are broadly optimistic about the company’s ability to boost its share price. Consensus price estimates suggest IEX stock could rise by nearly a quarter, and five out of six analysts have rated it a Buy.
Record Revenue and $1B in Orders Signal Growth Momentum Amid Strategic Expansion for ITT
ITT Inc. NYSE: ITT develops products for fluid and motion control, serving the aerospace and defense, transportation, and energy industries. The company’s marine sector business has gotten a significant boost in recent months as ITT has integrated Svanehøj, a maker of deepwell pumps, into its operations.
This has helped to drive a 16% year-over-year (YOY) improvement in company-wide orders, which surged to $1 billion in the latest quarter.
More orders have also led to greater revenue, and ITT hit an all-time record of $972 million in the second quarter, prompting the company to raise its full-year guidance.
Focusing on expanding across multiple high-growth areas and continuing to develop its technologies, ITT has made progress in improving margins and profitability.
Still, investors will want to see further increases in some of the company’s business lines and watch for ITT’s ability to manage the risk of tariffs going forward. Nine out of 10 analysts rate ITT a Buy, signaling widely held bullish sentiment.
Semiconductor Player Gains Momentum With Global Expansion and Analyst Buy Ratings
Entegris Inc. NASDAQ: ENTG provides a range of materials and equipment used in the process of manufacturing semiconductors, making it an essential partner to many of the largest tech firms across the market. Though demand may be strong, the industry has faced numerous challenges, including shifting regulations and tariffs. These have weighed on Entegris in recent months, as the company saw a modest YOY increase in its sales for the last quarter.
For Entegris, a key strategic goal has been solidifying its international presence, and the company has achieved notable success there—strengthening sales in China and growing production levels at plants outside the United States should help the company meet demand across Asia.
Still, despite climbing by nearly 20% in the last month, ENTG shares remain slightly down (by under 2%) YTD. Though not at historic lows, the company’s P/E ratio is close to its lowest level in multiple years.
While Entegris may not be significantly undervalued, the company’s price history and critical role in a high-demand space may be enough to drive investor attention. Analysts seem to think so, with seven out of 10 calling ENTG a Buy and predicting almost 10% upside potential.
Should You Invest $1,000 in IDEX Right Now?
Before you consider IDEX, you’ll want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and IDEX wasn’t on the list.
While IDEX currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.