Illinois Tool Works vs. ABB Ltd.: Which Industrial Machinery Stock is a Better Buy?
StockNews
Published Nov 30, 2021 04:23PM ET
Updated Nov 30, 2021 05:31PM ET
Illinois Tool Works vs. ABB Ltd.: Which Industrial Machinery Stock is a Better Buy?
Even though investors are worried about the impact of the omicron coronavirus variant on the economic recovery, the industrial machinery sector has been gaining attention primarily due to President Biden’s infrastructure bill. ABB (ABB) and Illinois Tool Works (ITW) should benefit from the rising demand for automation solutions. But which of these two stocks is a better buy now? Read more to find out.Headquartered in Zurich, Switzerland, ABB Ltd (ABB) manufactures and sells electrification, industrial automation, and robotics and motion products worldwide. It operates through four segments: Electrification; Robotics & Discrete Automation; Industrial Automation; and Motion. On the other hand, Illinois Tool Works Inc. (NYSE:ITW) manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products.
The resurgence of COVID-19 cases and rising concerns over the highly transmissible omicron coronavirus variant make investors worried about the economic recovery. In addition, high inflation has contributed to market volatility. However, the Fed’s continued near-zero interest rates, rapid vaccination, and supportive government policies have boosted the industrial machinery sector’s growth. Moreover, the $1 trillion infrastructure bill passed on November 15 is also expected to boost the industrial machinery sector’s growth in the upcoming months. Therefore, both ABB and ITW should benefit.
ABB has gained 5.2% over the past month, while ITW has returned 4.5%. Also, ABB’s 24.3% gain year-to-date is significantly higher than ITW’s 16.8% return. Moreover, ABB is the clear winner with a 30.6% gain versus ITW’s 12.2% return over the past year.
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