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8 Industrial Stocks With Big Upside Potential

Stocks in this article: CMI FAST TXT FDX AOS KELYA FLS URI CAT

8. A.O. Smith (AOS)

Company profile: A.O. Smith, with a market value of $2 billion, is a manufacturer of water heating equipment and electric motors for the residential, commercial and industrial markets.

Dividend Yield: 1.5%

Investor takeaway: Its shares are up 26% this year and have a three-year, average annual return of 25%. Analysts give its shares four "buy" ratings, two "buy/holds," and seven "holds," according to a survey of analysts by S&P. S&P has a $60 price target on its shares, which is an 18% premium to the current price.

7. Flowserve (FLS)

Company profile: Flowserve, with a market value of $6 billion, is a manufacturer of industrial pumps and related equipment for the chemical, oil and gas and power industries.

Dividend Yield:1.28%

Investor takeaway: Its shares are up 11.4% this year and have a three-year, average annual return of 15%. Analysts give its shares 10 "buy" ratings, two "buy/holds," and one "hold," according to a survey of analysts by S&P. S&P has a $145 price target on its shares, which is a 29% premium to the current price.

6. Federal Express (FDX)

Company profile: Federal Express, with a market value of $28 billion, provides domestic and international air express, residential and business ground package and freight delivery and logistics services worldwide.

Dividend Yield: 0.62%

Investor takeaway: Its shares are up 5.3% this year and have a three-year, average annual return of 11%. Analysts give its shares 15 "buy" ratings, six "buy/holds," and six "holds," according to a survey of analysts by S&P. S&P has a $122 price target on its shares, which is a 36% premium to the current price. It has a price-to-earnings ratio of 14, the lowest of its peers.

5. Fastenal (FAST)

Company profile: Fastenal, with a market value of $13 billion, provides building industry and industrial customers with all types of fasteners such as nails and screws as well as general-purpose maintenance, repair, and operations items. With more than 2,600 store and distribution locations, it generated $2.8 billion in revenue in 2011. Its results are closely tied to that of the construction industry.

Dividend Yield: 1.7%

Investor takeaway: Its shares are down 1% this year, but have a 10-year, average annual return of 18%. Analysts give its shares two "buy" ratings, nine "holds," and two "weak holds," according to a survey of analysts by S&P.

S&P has a $60 price target on its shares, which is a 40% premium to its current price. For fiscal year 2012, analysts estimate it will earn $1.44 per share, including 37 cents in the second quarter, which is up 19% over last year. It's expected to grow annual earnings by 19%, to $1.71 per share, in 2013.

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