The industrial sector has its share of interesting names and Stock story. Caterpillar, Deereand some big-cap aerospace and defense companies check those boxes.
However, this group is the sixth largest sector in the world S&P 500yet includes some companies that are not really charismatic. Some may be downright boring, but there are examples of beauty and boredom WW Grainger (NYSE: GWW) May prove to be one.
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The industrial parts supplier has some credibility as a hidden gem for several reasons, including its understated business model and four-figure price tag that likely put some off. Retail investors Fortunately in the bay, there’s a lot more to like with Granger’s story.
Founded nearly a century ago, Grainger operates in the Maintenance, Repair and Operations (MRO) space. Corporate jargon aside, the company sells a range of products that aren’t “sexy,” but are necessary in the day-to-day operations of factories, warehouses, and other businesses.
One of the interesting things about this industry is that it is fragmented. There are big players like Granger and Amazon (NASDAQ: AMZN )as well as a number of minor candidates. So yes, there’s competition, but scale is essential, and Grainger has it, confirming its status as a broad-cut name.
Here’s a way to see Granger. Say you are the manager of a widget factory that employs 100 people. It’s possible that several hundred, or even thousands, of parts, pieces, and other odds and ends are needed to make things work properly.
It is difficult to source these products from many vendors. Grainger alleviates this burden by stocking millions of items, which helps it build a sticky customer base.
This is one of the reasons why some analysts consider Granger one of the best industrial stocks to own. Beyond the wide moat, there are other catalysts for this industrial undercurrent, including a political element.
Bilateralism is difficult in the current environment. Still, both major parties are trying to bring more manufacturing jobs to the U.S. If those efforts pay off and more factories, industrial facilities, and warehouses are built, Grainger stands to benefit. However, a factory cannot operate with empty shelves.
