In this article, we will take a look at the 5 best industrial dividend stocks to buy now. To read our analysis of the recent trends, and market activity, you can go to the 10 Best Industrial Distribution Stocks to Buy Now.
5. Fastenal Company (NASDAQ:FAST)
Number of Hedge Fund Holders: 33
Winona, Minnesota-based Fastenal Company (NASDAQ:FAST) is a leading wholesale distributor of industrial and construction supplies with a focus on fasteners, safety supplies, and other smaller product categories such as janitorial supplies, and cutting tools. Its products are sold in 25 countries through a network of more than 3,300 in-market locations.
On May 4, Fastenal Company (NASDAQ:FAST) released its sales figures for the month of April. Its net sales maintained their upward trajectory and increased by 2.7% y-o-y to $586 million during the month.
Fastenal Company (NASDAQ:FAST) has paid regular quarterly dividends since 2011 and the dividend payouts have grown at a CAGR of 10.8% over the last 10 years. Currently, the company pays a regular quarterly dividend of $0.35 per share.
4. Watsco, Inc. (NYSE:WSO)
Number of Hedge Fund Holders: 36
Miami, Florida-based Watsco, Inc. (NYSE:WSO) is a leading heating, air conditioning and refrigeration (HVAC/R) products distributor with a network of 673 locations in the United States, Canada, Mexico, and Puerto Rico. It also distributes its products on an export basis to Latin America and the Caribbean.
On April 20, Watsco, Inc. (NYSE:WSO) released its financial results for Q1 2023. It generated a revenue of $1.55 billion and a net income of $110 million. It generated a normalized EPS of $2.83 which surpassed consensus estimates by $0.44.
Watsco, Inc. (NYSE:WSO) has paid dividends to its shareholders for 49 consecutive years. The latest increase in the dividend payouts for the company came into effect in January as it boosted annual dividends by 11% to $9.80 per share. Its dividends have grown at a CAGR of 21% since the company entered the distribution market in 1989.
This is what SouthernSun Asset Management, LLC, an investment management firm, had to say about Watsco, Inc. (NYSE:WSO) in its Q1 2023 investor letter:
“Watsco Inc. (WSO), the largest distributor of air conditioning, heating and refrigeration products in North America, was the top contributor this quarter, delivering record sales (+5%) and adjusted EPS (+16%) in the fourth quarter and capping off the second consecutive year of strong growth . . . . Overall, we continue to believe Watsco has a long runway for growth, an owner-oriented culture and competitive advantages that increase with scale.”
3. Pool Corporation (NASDAQ:POOL)
Number of Hedge Fund Holders: 41
Founded in 1983, Pool Corporation (NASDAQ:POOL) is the world’s largest wholesale distributor of swimming pool and related outdoor living products operating over 420 sales centers in North America, Europe, and Australia.
On April 20, Pool Corporation (NASDAQ:POOL) released its financial results for Q1 2023. It generated a revenue of $1.2 billion, 15% lower than the last year, and a net income of $102 million. On May 4, the Board of Directors of the company declared a quarterly cash dividend of $1.10 per share which represents a 10% increase to the previous quarterly dividend.
Following the earnings release, Deutsche Bank lowered the price target on Pool Corporation (NASDAQ:POOL) shares to $445 from $460 and maintained a ‘Buy’ rating on the shares as the firm believes that the company’s valuation still looks attractive.
As of Q1 2023, Pool Corporation (NASDAQ:POOL) shares were held by 41 hedge funds with a total value of $1.2 billion. Robert Joseph Caruso’s Select Equity Group was its largest hedge fund shareholder with ownership of 1.4 million shares valued at $463 million.
2. WESCO International, Inc. (NYSE:WCC)
Number of Hedge Fund Holders: 51
Pittsburgh, Pennsylvania-based WESCO International, Inc. (NYSE:WCC) is a leading provider of business-to-business distribution, logistics services and supply chain solutions. It operates in more than 50 countries through a network of nearly 800 branches, warehouses, and sales offices.
On May 4, WESCO International, Inc. (NYSE:WCC) released its financial results for Q1 2023. Its net revenue surged by 12% y-o-y to $5.5 billion while net income increased by 9% y-o-y to $197 million. The surge in the revenue reflects multiple factors including inflation and volume growth, secular demand trends, cross-selling, and the acquisition of Rahi Systems Holdings, Inc., a hyperscale data center solutions provider.
Following the earnings release, Baird analyst David Manthey upgraded the rating on WESCO International, Inc. (NYSE:WCC) shares to ‘Outperform’ from ‘Neutral’ with a target price of $180. The analyst cited plentiful secular growth factors for the company as the main reason for the upgrade.
As of Q1 2023, WESCO International, Inc. (NYSE:WCC) was the second best industrial distribution stock according to hedge funds as 51 of them held its shares with a total value of $2.2 billion.
1. Ferguson plc (NYSE:FERG)
Number of Hedge Fund Holders: 62
Based in Wokingham, United Kingdom, Ferguson plc (NYSE:FERG) is a value-added distributor providing products and solutions for infrastructure, plumbing and appliances, heating, ventilation, and air conditioning (HVAC), fire, fabrication, and others.
Ferguson plc (NYSE:FERG) reported strong quarterly results for the three months ended January 31. Its net sales increased by 5% y-o-y to $6.8 billion while net income stood at $374 million. It also completed four acquisitions during the quarter with aggregate annualized revenues of nearly $300 million.
On May 24, Barclays analyst Matthew Bouley raised the price target on Ferguson plc (NYSE:FERG) shares to $175 from $159 and maintained an ‘Overweight’ rating for the shares.
Ferguson plc (NYSE:FERG) is the best industrial distribution stock to buy now according to the hedge funds tracked by Insider Monkey. The stock was owned by 62 prominent hedge funds out of the 943 tracked by Insider Monkey, with a total value of $3.2 billion. Notable hedge funds like Renaissance Technologies added the stock to their portfolios during the quarter while others such as Millennium Management and Third Point significantly increased their investments.
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