Wells Fargo’s preferred Industrial stocks: ADP, CAT, DE, etc.

Aerospace and defense (ITA), commercial and professional services, and multi-industrials (NYSEARCA:XLI), (IYJ) are among Wells Fargo’s favorable subsectors due to robust defense spending, according to its Global Securities Research team.

Wells Fargo Investment Institute’s Global Securities Research published a list of what their analysts consider the most favorable sub-sectors within the S&P 500 (SP500).

Cargo ground transportation and passenger airlines are the most unfavorable sub-sectors.

“Consumer-oriented markets (transportation and building products) have been pressured as a reversion in consumer wallets toward services spending, higher interest rates, and destocking have taken their toll,” wrote analyst Larry Pfeffer in the note. “Although leading indicators have turned modestly positive, we have not yet seen a strong turn in broad short-cycle markets.”

Analysts anticipate a modest bounce in these subsectors in the near term, led by higher capital spending in areas such as aerospace and defense equipment (ITA), (XAR), (PPA), infrastructure (IFRA), electrification, data centers (DTCR), (SIXG), (CLOU), and automation (ROBO).

Highlighted stocks:

• Automatic Data Processing (ADP) – Dividend yield: 2.0%; Estimated 12-month EPS: $10.26
• Broadridge Financial Solutions (BR) – Dividend yield: 1.6%; Estimated 12-month EPS: $8.73
• Caterpillar (CAT) – Dividend yield: 1.4%; Estimated 12-month EPS: $22.71
• Canadian Pacific Kansas City Limited (CP) – Dividend yield: 0.7%; Estimated 12-month EPS: $3.59
• CSX Corp. (CSX) – Dividend yield: 1.4%; Estimated 12-month EPS: $2.08
• Cintas Corp. (CTAS) – Dividend yield: 0.8%; Estimated 12-month EPS: $4.39
• Deere & Company (DE) – Dividend yield: 1.4%; Estimated 12-month EPS: $22.74
• Emerson Electric Co. (EMR) – Dividend yield: 1.9%; Estimated 12-month EPS: $5.94
• Eaton Corp. Plc. (ETN) – Dividend yield: 1.1%; Estimated 12-month EPS: $11.72
• Fastenal Company (FAST) – Dividend yield: 2.2%; Estimated 12-month EPS: $2.14
• General Dynamics Corp. (GD) – Dividend yield: 1.9%; Estimated 12-month EPS: $15.94
• GE Aerospace (GE) – Dividend yield: 0.6%; Estimated 12-month EPS: $4.98
• W. W. Grainger (GWW) – Dividend yield: 0.8%; Estimated 12-month EPS: $41.39
• GXO Logistics (GXO) – Dividend yield: 0%; Estimated 12-month EPS: $3.19
• Honeywell International (HON) – Dividend yield: 2.2%; Estimated 12-month EPS: $10.93
• Hubbell Inc. (HUBB) – Dividend yield: 1.1%; Estimated 12-month EPS: $17.37
• Illinois Tool Works (ITW) – Dividend yield: 2.3%; Estimated 12-month EPS: $10.64
• Lincoln Electric Holdings (LECO) – Dividend yield: 1.5%; Estimated 12-month EPS: $9.38
• L3Harris Technologies (LHX) – Dividend yield: 1.9%; Estimated 12-month EPS: $13.95
• Lockheed Martin (LMT) – Dividend yield: 2.2%; Estimated 12-month EPS: $28.04
• Landstar System (LSTR) – Dividend yield: 0.8%; Estimated 12-month EPS: $6.97
• Paycom Software (PAYC) – Dividend yield: 0.9%; Estimated 12-month EPS: $8.49
• Paychex (PAYX) – Dividend yield: 2.8%; Estimated 12-month EPS: $5.08
• PACCAR (PCAR) – Dividend yield: 1.2%; Estimated 12-month EPS: $8.07
• Parker-Hannifin Corp. (PH) – Dividend yield: 1.0%; Estimated 12-month EPS: $27.36
• RBC Bearings. (RBC) – Dividend yield: 0%; Estimated 12-month EPS: $10.23
• RELX Plc (RELX) – Dividend yield: 1.7%; Estimated 12-month EPS: $1.69
• Rockwell Automation (ROK) – Dividend yield: 1.9%; Estimated 12-month EPS: $10.67
• Rollins (ROL) – Dividend yield: 1.2%; Estimated 12-month EPS: $1.09
• RTX Corp. (RTX) – Dividend yield: 2.0%; Estimated 12-month EPS: $5.99
• Trex Company (TREX) – Dividend yield: 0%; Estimated 12-month EPS: $2.16
• Trane Technologies (TT) – Dividend yield: 0.9%; Estimated 12-month EPS: $12.01
• Uber Technologies (UBER) – Dividend yield: 0%; Estimated 12-month EPS: $1.99
• Union Pacific Corp. (UNP) – Dividend yield: 2.2%%; Estimated 12-month EPS: $12.15
• United Parcel Service (UPS) – Dividend yield: 5.0%; Estimated 12-month EPS: $8.59
• Waste Connections (WCN) – Dividend yield: 0.6%; Estimated 12-month EPS: $5.31
• Waste Management (WM) – Dividend yield: 1.4%; Estimated 12-month EPS: $7.82
• Xylem (XYL) – Dividend yield: 1.1%; Estimated 12-month EPS: $4.67