Machinery stocks

The best machinery stocks depend on your portfolio and investment goals — while volatility can be ideal for day traders, long-term investors will want to look to stocks with steadier gains over time.

Our picks for the best machinery stocks

We round up a selection of stocks in or related to the heavy equipment industry, weighting the list more heavily towards popular mid- and large-cap US stocks.

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1. Caterpillar (CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. Its Construction Industries segment offers asphalt pavers, compactors, cold planers, motor graders, pipelayers, forestry machines, road reclaimers, wheel excavators, telehandlers; backhoe, compact track, multi-terrain, skid steer loaders, and track-type loaders; and track-type tractors.

• Previous close price: $209.07
• Market capitalization: $108,173,100,000
• 1 year performance: N/A
• P/E ratio: 13.8523

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2. Dover Corporation (DOV)

Dover Corporation provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. The company's Engineered Products segment provides various equipment, component, software, solution, and services that are used in aftermarket vehicle service, solid waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing end-market. This segment also offers manual and power clamp, rotary and linear mechanical indexer, conveyor, pick and place unit, glove port, and manipulator, as well as end-of-arm robotic gripper, slide, and end effector.

• Previous close price: $135.06
• Market capitalization: $18,646,335,488
• 1 year performance: 7.78%
• P/E ratio: 17.8011

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3. Flowserve Corporation (FLS)

Flowserve Corporation designs, manufactures, distributes, and services industrial flow management equipment in the United States, the Middle East, Africa, Asia Pacific, and Europe. It operates through Flowserve Pump Division (FPD) and Flow Control Division (FCD) segments. The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines.

• Previous close price: $33.08
• Market capitalization: $4,674,150,400
• 1 year performance: 15.83%
• P/E ratio: 18.7579

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4. Cummins (CMI)

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and New Power.

• Previous close price: $206.86
• Market capitalization: $30,832,203,776
• 1 year performance: N/A
• P/E ratio: 11.6533

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5. Illinois Tool Works (ITW)

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products.

• Previous close price: $221.98
• Market capitalization: $69,648,490,496
• 1 year performance: 12.68%
• P/E ratio: 22.2289

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6. Ingersoll Rand (IR)

Ingersoll Rand Inc. provides various mission-critical air, fluid, energy, specialty vehicle, and medical technologies in the United States, Europe, the Middle East, India, Africa, and the Asia Pacific. It operates through two segments, Industrial Technologies and Services, and Precision and Science Technologies.

• Previous close price: $61.25
• Market capitalization: $23,822,182,400
• 1 year performance: 36.84%
• P/E ratio: 36.5776

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7. Graco (GGG)

Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The company's Industrial segment offers proportioning systems to spray polyurethane foam and polyurea coatings; equipment that pumps, meters, mixes and dispenses sealant, adhesive, and composite materials; and gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators, and precision dispensing solutions.

• Previous close price: $77.61
• Market capitalization: $12,984,064,000
• 1 year performance: N/A
• P/E ratio: 27.2544

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8. Xylem (XYL)

Xylem Inc. , together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions for the water and wastewater applications in the United States, Europe, the Asia Pacific, and internationally. It operates through three segments: Water Infrastructure, Applied Water, and Measurement & Control Solutions.

• Previous close price: $118.64
• Market capitalization: $23,544,596,480
• 1 year performance: 25.21%
• P/E ratio: 48.2108

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9. ITT (ITT)

ITT Inc. manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets worldwide. The company operates in three segments: Motion Technologies, Industrial Process, and Connect & Control Technologies.

• Previous close price: $93.14
• Market capitalization: $6,833,432,064
• 1 year performance: 19.00%
• P/E ratio: 17.5699

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10. Deere-and-Company (DE)

Deere & Company manufactures and distributes various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment provides mid-size tractors, combines, cotton pickers and strippers, sugarcane harvesters, harvesting front-end equipment, sugarcane loaders, pull-behind scrapers, and tillage and seeding equipment, as well as application equipment, including sprayers and nutrient management, and soil preparation machinery for grain growers.

• Previous close price: $352.57
• Market capitalization: $109,956,202,496
• 1 year performance: 1.93%
• P/E ratio: 12.4688

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11. Kulicke and Soffa Industries (KLIC)

Kulicke and Soffa Industries, Inc. designs, manufactures, and sells capital equipment and tools used to assemble semiconductor devices. It operates through two segments, Capital Equipment, and Aftermarket Products and Services (APS).

• Previous close price: $50.80
• Market capitalization: $3,049,807,616
• 1 year performance: 6.52%
• P/E ratio: 14.2593

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Note: The dollar amounts in the table below are in Canadian dollars.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

Bottom line

While it's possible to turn a profit investing in machinery stocks, keep in mind that — like any investment — machinery stocks are not immune to risk. These stocks are subject to fluctuating conditions — both in the market and in the heavy equipment industry, so carefully vet your picks before you invest. And if you're new to investing, or if it's been awhile since you've taken a critical look at your investing accounts, compare brokers to make sure you're getting the best features in your trading account.