Precision manufacturing has become a cornerstone of modern engineering, enabling industries to achieve unparalleled levels of accuracy and efficiency. These companies specialize in creating high-quality components used in sectors like aerospace, medical devices, and automotive.

Amid this backdrop, investors might consider grabbing shares of three well-positioned precision manufacturing stocks, Corning Incorporated (GLW), Watts Water Technologies, Inc. (WTS), and TE Connectivity plc (TEL), for potential gains.

The rapid evolution of manufacturing technology underscores the need for industries to adapt and innovate. Precision manufacturers are revolutionizing traditional production methods by leveraging advanced technologies such as Computer Numerical Control (CNC) machining and 3D printing. Manufacturers embracing these manufacturing automation trends can maintain a competitive edge while fostering greater sustainability and an efficient future. 

As per the Deloitte outlook, favorable economic conditions in 2025, such as lower interest rates and continued investment in U.S. manufacturing, might reignite the demand in the industry. Also, in the third quarter of 2024, the manufacturing sector contributed $2.93 trillion to the U.S. economy, which was 10% of the total value-added output. 

Furthermore, the industry is increasingly adopting automation and digital tools to enhance productivity and reduce costs. Smart factories equipped with IoT-enabled machinery and real-time monitoring systems are becoming the norm, enabling manufacturers to push the boundaries of engineering excellence further.

According to Statista, the global manufacturing market is projected to reach $13.8 trillion in 2025, growing at a CAGR of 1.4%

Now, let’s take a closer look at the fundamentals of the above-mentioned three Industrial – Manufacturing stocks, beginning with the third pick.

Stock #3: Corning Incorporated (GLW)

GLW is a materials science, technology, and innovation company. The company operates through five segments: Optical Communications; Display Technologies; Specialty Materials; Environmental Technologies; and Life Sciences.

On January 22, GLW and Samsung Electronics Co., Ltd. announced that the Galaxy S25 Ultra will feature Corning® Gorilla® Armor 2, the industry’s first scratch-resistant, anti-reflective glass ceramic cover material for mobile devices. This collaboration provides customers with advanced and innovative technologies and sets a new standard of durability.

On October 28, AT&T Inc. (T) and GLW signed a multi-year purchase agreement. Under this agreement, GLW will provide next-generation fiber, cable, and connectivity solutions to support AT&T’s fiber network expansion and help bring high-speed internet.

For the third quarter of 2024, which ended on September 30, GLW’s net sales increased 6.9% year-over-year to $3.39 billion. The company’s operating income for the quarter amounted to $302 million, representing an increase of 28% year-over-year.

Its core net income stood at $465 million, up 20.5% year-over-year, while its core earnings per share rose 20% from the prior year’s quarter to $0.54. Also, GLW’s adjusted free cash flow grew 18.7% from the year-ago value to $553 million.

The consensus revenue estimate of $3.76 billion for the fiscal fourth quarter (ended December 2024) represents a 14.9% increase year-over-year. The consensus EPS estimate of $0.56 for the current quarter indicates a 42.7% improvement year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus revenue estimates in each of the trailing four quarters.

The stock has gained 77.4% over the past year and 72.7% over the past nine months to close the last trading session at $54.01.

GLW’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

GLW has an A grade for Growth and Momentum and a B for Sentiment. It is ranked #14 out of 35 stocks in the B-rated Industrial – Manufacturing industry. Click here to see the additional ratings for GLW (Value, Stability, and Quality).

Stock #2: Watts Water Technologies, Inc. (WTS)

WTS is a global supplier of products, solutions, and systems that manage and conserve the flow of fluids and energy into, through, and out of buildings in the commercial, industrial, and residential markets. 

On January 6, WTS announced the completion of the acquisition of I-CON Systems Inc., a leading provider of plumbing control solutions primarily for the corrections market. This acquisition will bring I-CON’s innovative water management systems that allow WTS to expand its digital offerings and strengthen its position in the market.

On December 13, demonstrating its commitment to returning value to shareholders, the company paid a quarterly dividend of $0.43 per share, up 35% from the previous quarter. WTS pays an annual dividend of $1.72, which translates to a yield of 0.81% at the current share price. Its four-year average dividend yield is 0.72%. Moreover, the company’s dividend payouts have increased at an impressive CAGR of 17.7% over the past three years.

WTS’ net sales for the third quarter (ended September 29, 2024) increased 7.8% year-over-year to $543.60 million. Its gross profit stood at $257.10 million, indicating a 9.7% growth from the prior-year quarter.

Its net income rose 5% from the year-ago value to $69.10 million, while its net income per share stood at $2.06, up 5.1% year-over-year. Also, the company reported a free cash flow of $204.20 million, indicating a 12.3% growth from the prior year’s quarter.

Analysts expect WTS’ revenue and EPS for the current year (ended December 2024) are expected to grow by 9.4% and 5.6% from the prior year to $2.25 billion and $8.73, respectively.

Over the past three months, the stock has surged 13.7%, closing the last trading session at $211.07.

It’s no surprise that WTS has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Momentum and Quality. Out of 35 stocks in the same B-rated industry, WTS is ranked #7.

Beyond what is stated above, we’ve also rated WTS for Growth, Value, Stability, and Sentiment. Get all WTS ratings here.

Stock #1: TE Connectivity plc (TEL)

Based in Ballybrit, Ireland, TEL is a global industrial technology company that manufactures and sells connectivity and sensor solutions. The company operates through three segments: Transportation Solutions; Industrial Solutions; and Communications Solutions. 

With 13 years of consecutive dividend growth, TEL pays an annual dividend of $2.60, which translates to a yield of 1.75% at the current share price. Its four-year average dividend yield is 1.62%. Also, the company’s dividend payouts have increased at CAGRs of 8.7% and 6.9% over the past three and five years, respectively.

During the first quarter that ended December 27, 2024, TEL posted a total group revenue of $3.84 billion, indicating a marginal growth from the prior-year quarter. Its adjusted EBITDA increased marginally year-over-year to $931 million, and the adjusted EPS came in at $1.95, which is up 6% year-over-year. Also, the company’s free cash flow amounted to $674 million, reflecting an increase of 18.2% year-over-year.

Street expects TEL’s revenue for the fiscal second quarter (ending March 2024) to increase marginally year-over-year to $4.01 billion. Its EPS for the same period is expected to register a 6% growth from the prior year, settling at $1.97. In addition, it surpassed the EPS in each of the trailing four quarters, which is promising.

The stock has gained 16.4% over the past year and 7.9% over the past month to close the last trading session at $155.09.

TEL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

TEL has a B grade for Value, Momentum, Stability, and Quality. It is ranked #2 in the Industrial – Manufacturing industry. Click here to access the TEL’s additional ratings for Growth and Sentiment.

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TEL shares were trading at $155.93 per share on Thursday afternoon, up $0.84 (+0.54%). Year-to-date, TEL has gained 9.06%, versus a 3.69% rise in the benchmark S&P 500 index during the same period.

About the Author: ShreyaRathi

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