Editors' pick: Originally published March 15.
Crude oil has shown some remarkable signs of life of late after an extended period of weakness took prices to multi-year lows. Prices have jumped about 30% from a low hit earlier this year, leading many investors to believe that a bottom has finally been established. That's good news for the market, and good news for energy-related shares.
However, while the industry has broadly rallied since the low, investors should pause before they jump into the energy sector. Further volatility should be expected in the space, and the impact of the price collapse will likely be felt for a long time. Instead, market participants would be wise to look at the industrial sector, which is tied to many of the macroeconomic trends benefitting energy but doesn't carry the same risks.
It's understandable if investors remain concerned by industrial or energy-related stocks. Both groups continue to see big swings, and that's always unsettling, even if the move is to the upside. The important lesson for investors to learn is to remove emotion from the equation as much as possible. Don't focus on day-to-day noise or rumors or speculation. Instead, focus on the fundamentals of the companies, and built your portfolio on facts and hard data. That is a strategy that will work for you in any environment.
Here are five industrial stocks with strong fundamentals that appear poised to rally in the current environment
General Electric (GE)
One of the quintessential world companies, GE is a dominant force in nearly any industrial segment you can name. While its international reach makes it somewhat vulnerable to overseas weakness, it is so stable and well-managed that investing here is almost as safe as putting your money in a bank. Also, it boasts a dividend yield of 3.05%, above the 2.62% average of its peers.