The industrial machinery sector is on a smooth ride to gain momentum owing to technological breakthroughs in operations and gradually decreasing operating costs. Amid this backdrop, investors could scoop up shares of fundamentally stable industrial stocks, Columbus McKinnon Corporation (CMCO), Tennant Company (TNC), and The Gorman-Rupp Company (GRC), which are currently trading at attractive valuations.

The industrial machinery market has benefitted much from Industry 4.0, also known as the fourth industrial revolution. The integration of advanced technologies such as cloud computing, machine learning, the Internet of Things, and artificial intelligence (AI) into the production process is creating a more efficient, flexible, and connected manufacturing environment.

According to a report by market.us, the global Industry 4.0 market is forecasted to reach $482 billion by 2032, growing at an impressive CAGR of 20.7%.

Moreover, the inclusion of technologies such as 3D printing and big data analytics has resulted in increased productivity, lower operating costs, and larger profits. More than 90% of business leader have shown their support in integrating AI to boost productivity. Additionally, these cutting-edge advancements have also succeeded in lowering operating costs, resulting in larger margins and overall higher prospects for the industry.

According to a study by Business Research Insights, the global industrial machinery market is expected to reach $906.25 billion by 2032, growing at a CAGR of 3.4%, strengthening the inception of various opportunities for potential investors.

Considering these conductive trends, let us now dive deep into the fundamentals of three Industrial – Machinery stocks, starting with #3.

Stock #3: Columbus McKinnon Corporation (CMCO)

CMCO designs, manufactures, and markets motion solutions for moving, lifting, positioning, and securing materials. The company’s offerings include manual, battery, electric, and air hoists; steel, rack, and pinion jacks; winches, hydraulic jacks, and tools; trolleys and their clamps; and more.

In terms of forward non-GAAP P/E, CMCO is trading at 11.65x, 41% lower than the industry average of 19.76x. Likewise, the stock’s forward Price/Sales and forward EV/EBITDA multiples of 0.98 and 9.14 are 34.8% and 22.1% lower than their respective industry averages of 1.50x and 11.72x.

For the fiscal 2025 second quarter that ended September 30, 2024, CMCO’s net sales came in at $242.27 million. Its adjusted operating income was reported to be $26.96 million.

Additionally, the company’s adjusted net income and adjusted EPS amounted to $20.22 million and $0.70, respectively.

Analysts expect CMCO’s revenue and EPS for the fiscal 2025 fourth quarter (ending March 2025) to increase 4.1% and 20.3% year-over-year to $276.36 million and $0.90, respectively. Moreover, the company topped the consensus EPS estimates in three of the four trailing quarters.

Shares of CMCO have surged marginally over the past three months and 5.1% over the past six months, closing the last trading session at $34.40.

CMCO’s POWR Ratings reflect its solid fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

CMCO has a B grade for Value, Sentiment, and Momentum. Within the A-rated Industrial – Machinery industry, it is ranked #41 out of 78 stocks.

In addition to the POWR Rating highlighted above, you can check CMCO’s ratings for Quality, Growth, and Stability here.

Stock #2: Tennant Company (TNC)

TNC designs, manufactures, and markets floor cleaning equipment. The company sells its floor maintenance and cleaning equipment, detergent-free, and other sustainable cleaning technologies products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IPC, Gaomei, and Rongen brands.

On December 10, 2024, TNC announced the release of lithium-ion battery-powered versions of its popular T12 and T16 scrubbers. The new release comes with significant added benefits, including extended battery lifespan, reduced maintenance, and enhanced operator safety, which could boost the topline of the company.

In terms of forward non-GAAP P/E, TNC is trading at 12.43x, 37.1% lower than the industry average of 19.76x. Additionally, its forward EV/Sales and forward Price/Sales multiples of 1.30 and 1.17 are 34.4% and 21.6% lower than the industry averages of 1.98x and 1.50x, respectively.

For the fiscal 2024 third quarter that ended September 30, TNC’s net sales increased 3.6% year-over-year to $315.80 million. Its gross profit rose 1.4% from the year-ago value to $133.80 million.

Moreover, its adjusted net income and adjusted net income per share grew 4.7% and 3.7% from the prior year’s quarter to $26.60 million and $1.39, respectively.

Street expects TNC’s revenue for the fiscal year ending December 2025 to increase 3.6% year-over-year to $1.33. Its EPS for the same period is expected to come in at $6.26. Additionally, the company topped the consensus revenue and EPS estimates in three of the four trailing quarters.

TNC’s shares declined marginally intraday to close the last trading session at $79.73.

TNC’s sound fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

TNC has a B grade for Momentum, Value, and Quality. Within the Industrial – Machinery industry, it is ranked #14 out of 78 stocks.

To access TNC’s Sentiment, Stability, and Growth ratings, click here.

Stock #1: The Gorman-Rupp Company (GRC)

GRC designs, manufactures, and sells pumps and pump systems. Its offerings include self-priming centrifugal, standard centrifugal, magnetic drive centrifugal, axial, and mixed flow, vertical turbine line shafts, and more, which are used in water, wastewater, construction, dewatering, industrial, petroleum, agriculture, and other applications.

In terms of forward non-GAAP PEG, GRC is trading at 1.55x, which is 16.7% lower than the industry average of 1.86x. The stock’s forward Price/Sales ratio of 1.42x is 4.9% below the industry average of 1.50x. Also, its forward EV/EBITDA multiple of 10.54 is 10.1% lower compared to the industry average of 11.72x.

For the fiscal 2024 third quarter that ended September 30, GRC’s net sales marginally increased year-over-year to $168.18 million. Its operating income rose 9.2% from the year-ago value to $23.89 million.

Furthermore, the company’s non-GAAP adjusted earnings and non-GAAP adjusted EPS grew 43.9% and 44.1% from the prior year’s quarter to $12.92 million and $0.49, respectively.

The consensus revenue and EPS estimates of $162.84 million and $0.45 for the fiscal fourth quarter that ended December 2024 exhibit a year-over-year rise of 1.4% and 32.4%, respectively.

GRC’s shares have surged 8.7% over the past year to close the last trading session at $35.84.

GRC’s POWR Ratings reflect its strong prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

GRC has an A grade for Sentiment and a B for Value, Stability, and Momentum. Within the same industry, GRC Is ranked #4 out of 78 stocks.

Click here to access GRC’s ratings for Growth and Quality.

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TNC shares were unchanged in premarket trading Monday. Year-to-date, TNC has declined -2.21%, versus a -0.95% rise in the benchmark S&P 500 index during the same period.

About the Author: Aritra_Gangopadhyay

Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success. More...

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