3 Top Stocks in the Industrial Sector – The Motley Fool

3 Top Stocks in the Industrial Sector – The Motley Fool

Stimulus bills and small-business financing aside, investing in the stock market can be a worrisome ordeal when the worst of the COVID-19 (coronavirus) pandemic has yet to hit many cities.

Choosing companies with strong fundamentals with long-term tailwinds can make that process less worrisome. Here are three industrials with varying degrees of risk to round out your portfolio:

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Waste Management

Short-term struggles

Waste Management (NYSE:WM) stock has finally come down in price, and for good reason. America’s largest waste collection, transportation, and disposal company relied on the industrial and commercial sectors for 70% of collection revenue and 46% of total revenue in 2019. Rising unemployment, lower industrial production, and lower consumption of goods and services all spell less revenue for Waste Management in the near term.

But that’s OK. Waste Management’s residential sector and strong balance sheet will help the company through this difficult time. In terms of obligations, the company’s FCF easily covers dividend obligations, meaning Waste Management’s dividend is safe and sound. 

Long-term upside

As for the long-term, Waste Management has two prevailing tailwinds — a lack of competition and the growing quantity of waste produced by an ever-increasing, consumer-driven population.

Its transition from diesel to liquefied natural gas (LNG) and compressed natural gas (CNG) for its trucking fleet; its conversion of waste into energy; and its status as the largest recyclables collector make it a company that’s beneficial to the
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World's Best Investment Banks 2020: Sector Winners - Global Finance

World's Best Investment Banks 2020: Sector Winners - Global Finance

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