The Most Profitable Dow Industrial Stock

The following video is part of our "Motley Fool Conversations" series, in which the Fool's Isaac Pino and Catherine Baab-Muguira discusses topics from around the investing world.

In today's edition, Isaac and Cat dig in to the Dow Jones manufacturing companies, including 3M, General Electric, Caterpillar, Boeing, and United Technologies, in search of profits. However, it turns out that these can be hard to come by for the highly cyclical, capital-intensive industrial giants. Compared with high-tech stalwarts like Microsoft and Cisco, profit margins are razor-thin for focused manufacturers such as Caterpillar and Boeing:

Source: Morningstar.

The companies with the highest profits in this sector are those with diversified businesses where innovation and patented technologies differentiate their products. Leadership is critical in building these competitive advantages over time, and Isaac believes 3M and GE have cornered fast-growing markets that will drive their stocks higher over the long haul.

For GE, in particular, the company has positioned itself as an infrastructure leader and will play a huge role in the buildout of an energy grid that will be four times as large as the current U.S. power grid in 15 years. If you're a GE investor, you need to understand how this company will drive double-digit growth for the company primarily through GE Energy. At the same time, you need to be aware of the threats to GE's portfolio of businesses. To help, we're offering comprehensive coverage for investors in a premium report on General Electric. You'll find reasons to buy or sell GE, and you'll receive continuing updates as major events unfold during the year. To get started, click here now.

Cat Baab-Muguira has no positions in the stocks mentioned above. Isaac Pino owns shares of General Electric.  Motley Fool newsletter services have recommended buying shares of 3M and creating a diagonal call position in 3M. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (13)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1944053, ~/Articles/ArticleHandler.aspx, 10/28/2016 10:48:46 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,222.66 52.98 0.29%
S&P 500 2,138.80 5.76 0.27%
NASD 5,226.19 10.22 0.20%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 10:32 AM
BA $143.08 Down -0.24 -0.16%
Boeing CAPS Rating: ****
CAT $83.44 Up +0.43 +0.52%
Caterpillar CAPS Rating: ***
GE $29.08 Up +0.45 +1.55%
General Electric CAPS Rating: ****
UTX $101.16 Up +1.09 +1.09%
United Technologie… CAPS Rating: ****