It’s easy to forget the opportunities in dividend-paying industrial stocks. Let’s face it – the industrial segment isn’t the most exciting sector out there. However, it’s one of the most dependable because of its extraordinary relevance, particularly to infrastructure. In addition, recent dynamics bolster the case for dividend-paying industrial stocks. First, the passage of the Bipartisan Infrastructure Deal – the Infrastructure Investment and Jobs Act – bodes well for the wider sector. Second, companies providing passive income tend to perform better than non-dividend payers during bearish cycles.
Third, investors may prefer stability over outright capital gains potential. For this list of intriguing ideas, they’re all objectively undervalued relative to trailing-12-month earnings. This way, you’re also getting a potentially great deal. With that, below are dividend-paying industrial stocks to buy for 2023.
| EMR | Emerson Electric | $82.05 |
| GIC | Global Industrial | $28.04 |
| SNA | Snap-on | $246.01 |
| CVR | Chicago Rivet & Machine | $29.76 |
| BGSF | BGSF. | $15.28 |
| EBF | Ennis | $21.33 |
| CIX | CompX International | $15.54 |
Emerson Electric (EMR)
Based in Missouri, Emerson Electric (NYSE:EMR) manufactures products and provides engineering services for industrial, commercial, and consumer markets. Per its public profile, Emerson features approximately 170 manufacturing locations. To be fair, Emerson represents a riskier take among dividend-paying industrial stocks because of its recent poor quarterly earnings report. As well, the company suffered from lingering supply chain disruptions.
Still, in the long run, Emerson plays a significant role in the global automation market. Further, with the fallout in the charts, contrarian investors may sense an opportunity. Right now, the market prices EMR at a trailing multiple of 10.84. As a discount to earnings, Emerson ranks better than 76.41% of the competition.
On the passive income side, the company features a forward yield of 2.43%. While that’s only a bit above the industrial sector’s average yield of 2.36%, keep this in mind: Emerson commands 66 years of consecutive annual dividend increases. Finally, Wall Street analysts peg EMR as a consensus moderate buy. Their average price target stands at $101.57, implying nearly 19% upside potential.
Global Industrial (GIC)
Headquartered in Port Washington, New York, Global Industrial (NYSE:GIC) is a provider of industrial and maintenance, repair, and operations products through a system of branded e-commerce websites and relationship marketers in North America. In the year so far, GIC is off to a blistering start, gaining over 22% of equity value. However, in the trailing year, it’s down a bit more than 3%.
Even with the recent momentum, GIC may attract speculators of dividend-paying industrial stocks. For one thing, the market prices GIC at a trailing multiple of 10.21. As a discount to earnings, Global Industrial outpaces 62.5% of its rivals. Also, its price-earnings-growth ratio sits at 0.39 times. In contrast, the sector median value is 1.34 times. In terms of passive income, the company carries a forward yield of 2.48%. While this sits a bit on the lower side of the spectrum, the payout ratio pings at 32.14%. This implies a dependable yield, giving prospective investors tremendous confidence.
Snap-on (SNA)
A designer, manufacturer, and marketer of high-end tools and equipment, Snap-on (NYSE:SNA) represents a significant background player in various industries. These include automotive, heavy-duty, equipment, marine, aviation, and railroad sectors. Since the January opener, SNA gained 10% of its equity value. Further, it’s been on a positive run in the past 365 days, moving up nearly 21%.
Given its relevancies, SNA may continue marching higher. Despite its strengths and momentum, contrarian investors will appreciate its undervalued status. Right now, the market prices SNA at a trailing multiple of 15. As a discount to earnings, Snap-on ranks above 64.68% of the competition. Also, shares trade hands at 15.15-times forward earnings. For this metric, the company ranks better than 67.6% of its peers.
Regarding passive income, Snap-on carries a forward yield of 2.57%. Notably, the company commands 13 years of consecutive dividend increases. As well, its payout ratio sits at 36.41%, implying a very dependable dividend. Therefore, SNA ranks among the top dividend-paying industrial stocks to buy.
Chicago Rivet & Machine (CVR)
Based in Illinois, Chicago Rivet & Machine (NYSEAMERICAN:CVR) manufactures mechanical, pneumatic, and hydraulic riveting equipment for numerous industries. Again, it’s one of the unsung heroes of dividend-paying industrial stocks. You might not know the brand name but Chicago Rivet is incredibly pertinent and relevant. As evidence, CVR gained more than 6% in the trailing year. In contrast, the benchmark S&P 500 index fell more than 5% during the same period.
Financially, contrarian investors will take a liking to CVR. Presently, the market prices shares at a trailing multiple of 6.56. As a discount to earnings, Chicago Rivet ranks better than nearly 92% of sector peers. As well, CVR trades at 0.81 times sales. In contrast, the sector price-sales ratio stands at 1.53 times. Finally, the company benefits from outstanding stability in the balance sheet, particularly because it has no debt. On the passive income front, Chicago Rivet carries a forward yield of 3.04%. This is notably higher than the industrial sector’s average yield of 2.36%.
BGSF (BGSF)
Based in Plano, Texas, BGSF (NYSE:BGSF) is a company that in my opinion does a poor job of explaining what it does, choosing instead to bury its website visitors with a barrage of jargon and lexicon. However, its LinkedIn profile states that it’s a nationwide leader in strategic workforce solutions. Primarily, its services focus on technical industries, such as IT and cybersecurity. It also provides opportunities in the commercial sector.
Financially, BGSF creates an exciting opportunity for bargain hunters. Right now, the market prices BGSF at a trailing multiple of 5.53. As a discount to earnings, BGSF ranks better than nearly 91% of the competition. Also, shares trade at a forward multiple of 10.99. Relative to this particular metric, the company ranks above 70.39% of the underlying sector.
At the moment, the company carries a forward yield of 3.94%. To be fair, BGSF only features two years of consecutive dividend increases. However, its payout ratio of 43.32% rates fairly low. Therefore, it stands among the dividend-paying industrial stocks to buy.
Ennis (EBF)
Billed as a print solutions company, Ennis (NYSE:EBF) presently suffers from an incomplete website (if you go to its “About Us” section). However, Ennis tells you right off the bat what it does, which investors and analysts appreciate. The company provides printing capabilities to support various business needs, including branded presentation folders, envelopes, and labels. Further, it’s a surprisingly relevant endeavor. In the trailing year, EBF gained over 16% of equity value.
For those seeking a discounted idea among dividend-paying industrial stocks, Ennis could be intriguing. Right now, the market prices EBF at a trailing multiple of 13.38. As a discount to earnings, Ennis ranks better than 68.59% of the competition. Also, shares trade at 12.58 times free cash flow. Regarding this particular metric, the company outpaces nearly 71% of its peers.
Also, it’s worth noting that Ennis enjoys an excellent balance sheet, particularly its cash-to-debt ratio of 6.16 times. Also, its Altman Z-Score of 8 indicates a very low bankruptcy risk. Finally, EBF carries a forward yield of 4.61%. To be fair, its payout ratio stands at 65.36%, which is a bit on the high side. Nevertheless, Ennis’ total profile makes it one of the dividend-paying industrial stocks to buy.
CompX International (CIX)
Headquartered in Dallas, Texas, CompX International (NYSEAMERICAN:CIX) is a diversified domestic manufacturer of engineered, quality components providing critical functionality to its customers’ products. In the trailing year, CIX declined by 15%, making it one of the riskier dividend-paying industrial stocks. However, it’s attempting to make a reversal, with shares up 7% since the January opener.
Despite the wobbles, CIX will likely attract contrarian investors. For one thing, the market prices CIX at a trailing multiple of 12.43. As a discount to earnings, CompX ranks better than 65% of its rivals. Also, Gurufocus.com’s discounted cash flow (DCF) analysis implies that CIX is significantly undervalued. Per the analysis, the fair value of CIX should be $41.46. However, shares closed the Feb. 17 session at $19.26.
Also, the company enjoys operational strengths, with above sector-median values for revenue growth and net margin. As well, CompX commands a stable balance sheet, benefitting from zero debt. Finally, the company features a forward yield of 5.19%. That’s well above the industrial sector’s average, making it one of the top dividend-paying industrial stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.