The US market is renowned for having a wide variety of stocks to choose from.
Growth investors will focus on software-as-a-service companies or technology titans while income investors look for solid, dividend-paying businesses.
But why settle for either growth or dividends?
Here are four attractive US industrial stocks that can give you a sweet mix of both growth and dividends.
Lennox International (NYSE: NII)
Lennox is a leader in energy-efficient, climate-control solutions.
The company sells innovative products that help with cooling, heating, indoor air quality, and refrigeration systems.
Lennox reported a robust set of earnings for 2024.
Revenue rose 7.2% year on year to US$5.3 billion while operating profit (excluding exceptional items) climbed 20.8% year on year to US$1 billion.
Net profit improved by nearly 23% year on year to US$806.9 million.
The industrial company also generated a healthy free cash flow of US$782.1 million for 2024, 60.9% above the US$486 million churned out a year ago.
In line with the good results, the board upped the company’s quarterly dividend from US$1.10 to US$1.15.
Lennox has raised its dividend without fail since 2012, with this year being the 13th consecutive year that its dividend has increased.
For 2025, Lennox expects revenue growth to be around 2% year on year while the company should generate between US$650 million to US$800 million of free cash flow.
Honeywell International (NASDAQ: HON)
Honeywell is an industrial company serving a broad range of industries with actionable solutions and innovative products.
The company is aligned with three megatrends – automation, the future of aviation, and energy transition.
2024 saw Honeywell’s revenue rise 7.7% year on year to US$39.5 billion.
Net profit excluding impairment losses rose 4.7% year on year to US$5.9 billion.
The industrial company also generated a positive free cash flow of US$4.9 billion, up almost 15% year on year.
Honeywell’s latest quarterly dividend came in at US$1.13, up 4.6% year on year.
This increase capped an impressive 15-year track record of rising dividends since 2011.
Management recently completed an internal portfolio review and will be separating its Automation and Aerospace divisions to unlock value for shareholders.
This separate will also enable greater focus, operational independence, and financial flexibility.
Meanwhile, Honeywell is also active in the acquisitions space as it announced the acquisition of Sundyne for US$2.16 billion.
Sundyne is a leader in the design, manufacture, and aftermarket support of highly engineered pumps and gas compressors used in process industries.
Northrop Grumman Corporation (NYSE: NOC)
Northrop Grumman is a global aerospace and defence technology company.
The company saw sales for 2024 rise 4.4% year on year to US$41 billion.
Operating profit surged 72.3% year on year to US$4.4 billion while net profit more than doubled year on year to US$4.2 billion.
Northrop Grumman also generated a pleasing free cash flow of US$2.6 billion, up nearly 25% year on year.
Management increased the company’s quarterly dividend by 10.2% year on year to US$2.06 per share.
Since 2009, the business has raised its annual dividend without fail, marking 16 consecutive years of increases.
Northrop Grumman’s strategy will continue to focus on maintaining technological leadership and growing its business profits sustainably.
At the same time, management will focus on driving performance and ensuring cost efficiencies.
Illinois Tool Works (NYSE: ITW)
Illinois Tool Works, or ITW, is a global multi-industrial manufacturing company producing engineered fasteners and components, and equipment and consumables systems.
The company reported a mixed set of earnings for 2024.
Revenue dipped by 1.3% year on year to US$15.9 billion but operating profit rose 5.5% year on year to US$4.3 billion.
Net profit climbed 18% year on year to US$3.5 billion.
The business also churned out a positive free cash flow of US$2.8 billion, although this was 7.8% lower than the prior year’s US$3.1 billion.
Management raised ITW’s quarterly dividend to US$1.50, up from US$1.40 previously, and has increased the company’s dividend without fail since 1996.
The company attributed its good performance to customer-back innovation or CBI, which represents its key driver for above-market performance.
ITW’s portfolio has around 21,000 patents, and the company will build on these patents to continue to innovate and deliver growth.
Total revenue is expected to decline by between 1% to 3% this year, but earnings per share should rise by around 5% year on year.
Free cash flow conversion should exceed net income and help to sustain ITW’s dividend growth for the foreseeable future.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
