Five Manufacturing Stocks to Buy Despite Weak January Data (Part-1)

January was the 15th straight month of U.S. manufacturing contraction after 28 months of expansion. U.S. manufacturing PMI (purchasing managers' index) rose to 49.1 in January from 47.1 in December, according to the Institute of Supply Management (ISM). The consensus was 47.6.

Any number below 50 suggests manufacturing downturn. However, January PMI improved significantly. At 52.5, the New Orders Index expanded 5.5% from December's 47. The Production Index rose 0.5% from December's 49.9 to 50.4.

Despite supply-chain interruptions, primarily linked to electronic component availability, the ISM report's Supplier Deliveries Index shows improvement. January's measure was 49.1, 2.1% higher than December's 47. Above 50 suggests slower delivery, which are usual as the economy improves and client demand rises.

Our Favorites Five manufacturing equities with 2024 potential have been selected. In the last 60 days, these stocks' profit estimates have improved. Additionally, these firms pay dividends regularly.

ETN research and development are helping Eaton Corp. to create innovative power management technologies. Improved end-market circumstances, new AI data center demand, and organic assets will benefit ETN.

ETN's acquisitions and growing backlog indicate product demand. Manufacturing in the zone of sale has reduced ETN's expenses. Our model predicts 2024–2025 revenue growth.

Eaton expects 6.7% sales growth and 10.4% profit growth this year. Over the last week, the Zacks Consensus Estimate for current-year profits rose 0.7%. ETN pays 1.27% dividends.

The Fire & Safety/Diversified Products (FSD) segment has helped IDEX Corp. Solid fire and rescue business momentum drives FSD segment growth. IEX is profiting from acquisitions. IEX anticipates buyout synergies to improve fourth-quarter sales by 2% and 2023 revenues by 4%.