While our politicians argue over the future of the American economy, a number of the country's biggest industrial manufacturers are actually doing something about it. Whether it's helping their customers get more and better use out of their equipment, developing breakthrough technologies that could change the way the world consumes energy, or tapping into a massive opportunity based on American resources, General Electric Company (NYSE:GE), Lockheed Martin Corporation (NYSE:LMT), and Chart Industries, Inc. (NASDAQ:GTLS) are all playing a role in driving an American industrial renaissance.
Keep reading to learn what these companies are doing that makes them stand out, and why they could make for great investments in years to come.
Reinventing the way we operate machinery
Tyler Crowe: For years, being smart about equipment maintenance meant doing regular checkups and replacing parts at scheduled intervals. It's better than waiting for a piece to break, but it isn't the most efficient or optimized way of going about things. One company looking to change that is General Electric, and it's part of the reason the company is at the forefront of the next industrial revolution.
General Electric is looking to change the dynamic of optimization and maintenance through remote sensing and its new data analysis platform, Predix. This will, for example, allow those using General Electric equipment -- and in some cases, other companies' equipment -- to monitor performance as well as a bunch of other different applications. In fact, the company has recently opened the platform such that developers can design apps using Predix for specific industrial applications.
One major advantage General Electric will have in the coming years in developing this platform is the fact that it has a massive installed base of GE equipment in the oil and gas, power generation, transportation, and healthcare industries. Having equipment in these various fields will produce loads of data developers can analyze to improve operations across a wide range of uses.
For General Electric, this also radically transforms the company from an industrial manufacturer with limited recurring revenue from replacement parts and equipment to one with potentially much larger recurring revenue from software licenses and subscriptions. In 2015, GE says that Predix generated $5 billion in revenue, and that's expected to grow to $15 billion by 2020. Clearly, this is a nice lever for the company to pull that should pay dividends for years to come.
Free energy! (shipping and handling not included)
Rich Smith: "Free energy" through cold fusion. This has been the dream of futurists and energy investors since at least as far back as when Val Kilmer starred in The Saint -- and Dr. Lev Botvin declared the idea "rather impossible."
But over at Lockheed Martin's (NYSE:LMT) Skunk Works, scientists eat the impossible for lunch -- and two years ago, Lockheed Martin announced a breakthrough in cold fusion that promises to change the world, solve global energy needs forever, and yes, spark an American Renaissance in the process.
According to Lockheed, it has invented a way to harness fusion nuclear energy in the form of a compact fusion reactor that is 90% smaller than past models. Within "as little as ten years," Lockheed believes it will be able to replicate the workings of the sun, fusing hydrogen atoms into helium in a reaction that produces more energy than it consumes. If Lockheed's boast comes to fruition, the company predicts a future in which it can produce "safe [...] clean power for the world," free of concerns over nuclear "proliferation," and fears of "emissions" of greenhouse gases alike.
Granted, most of us today are still burning dinosaur juice to power our automobiles and heat our homes. Despite the fact that Lockheed Martin made its boast two years ago, cold fusion is not yet a reality. That said, earlier this year, Lockheed Martin confirmed that it has created the "initial plasma" conditions needed to fuse hydrogen atoms into helium, and the company has begun making "a little bit more significant investment" in the project.
Lockheed Martin did give itself 10 years before it said it expected to have a product ready for sale.
As pie-in-the-sky as Lockheed's project still sounds, it still has the potential to change the world if it succeeds. Call me a crazy optimist, but I think that's something worth waiting another eight years for.
Building on the huge growth in demand for natural gas
Jason Hall: Since near the start of 2016, shares of Chart Industries, Inc. (NASDAQ:GTLS) have more than doubled. But even after these strong gains, Chart's stock is still far, far below its all-time high in 2013. And while there's no guarantee that Chart shares will approach those prices anytime soon, the company is in a great position to benefit from North America's huge supplies of cheap natural gas.
According to the American Chemistry Council, the petrochemicals industry is in the midst of massive investments in expanded capacity in the U.S., with 264 projects either completed or in some stage of planning or construction already in the pipeline. These projects, valued at $164 billion, are expected to create hundreds of thousands of jobs and generate hundreds of billions in annual revenue.
For Chart, which manufactures gas processing and handling equipment that is critical to these kinds of facilities, this is an absolutely massive opportunity -- and not just to sell equipment for a one-time gain. This equipment will need to be maintained and serviced to perform at optimal levels, and Chart will be perfectly positioned to grow its recurring revenue substantially as a result of this major expansion in American manufacturing.
Bottom line: Weak global growth has slowed Chart's progress over the past couple of years, but a boom in American petrochemicals manufacturing is set to help drive the company's profits higher for years to come.