Rate Hikes Are Back. Here Are 3 Industrial Stocks Built to Win Anyway
Higher interest rates squeeze margins, and automation helps reduce costs.
Overview
The Federal Reserve appears to have embarked on a cycle of rising interest rates. Bond yields have risen dramatically in anticipation of those hikes. Higher interest rates and bond yields increase interest expenses for companies and add to the inflationary pressures that have already been crimping profit margins.
In an effort to protect margins, companies have two basic options: raise prices and cut costs. Normally, both are employed at once. On the cost-cutting side, automation can help improve efficiency. And three major industrial companies that focus on automation are Rockwell Automation (NYSE: ROK), Emerson (NYSE: EMR), and Honeywell Technologies (NASDAQ: HON). Here's a quick look at how each one is winning despite rising interest rates.
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Originally published at www.fool.com.