The economy is a fickle beast. It’s hard to predict, and it frequently changes, mainly depending on the latest events that are taking place. When one part of the economy starts to slow down or contract, other sectors usually pick up the slack and help keep things moving. As investors, it’s up to us to recognize which industries will thrive under these circumstances and which ones might struggle. Many great companies provide commercial services and supplies for businesses, but not all make suitable investments. In this article, we will look at some of the best stocks in this sector and other industries that can be profitable for investors willing to take a risk.
Tetra Tech (TTEK)
Tetra Tech is a global engineering, construction, and consulting firm specializing in water and environmental infrastructure projects. It is currently transitioning from being a diversified engineering company to focusing on its core water, environmental, and infrastructure business segments. The company’s growth strategy is to expand its geographic footprint and increase its focus on water and other natural resources services. With water being such a precious resource and concerns about clean water growing, the need for companies like Tetra Tech to provide consulting and construction services will only increase. This company has a long history of steady growth and has proven that it can adapt as the market changes around it. Tetra Tech has been profitable for over 30 consecutive years and has paid dividends for the last 22 years. It has a strong balance sheet and a long-term focus on increasing shareholder value. The stock, which currently pays an annual dividend of $2.16 per share, has a price-to-earnings ratio of around 16.7 and a dividend yield of about 4.4%.
The Brink’s Company (BCO)
The Brink’s Company is a global security and cash management service provider for banks, retailers, and other commercial operations. It serves nearly 75,000 commercial customers and more than 450 government entities. The company’s revenue is split almost evenly between its cash management, security, and transportation segments, with cash management making up the majority. Brink’s has a wide-ranging clientele that includes some of the largest financial institutions in the U.S., the U.S. Army and Air Force, and even some retailers such as Walmart. This company has proven that it can pivot to meet its customers’ changing needs, especially regarding cash management and transportation. In recent years, Brink’s has also started expanding into cybersecurity. This is a high-risk investment, but the potential reward could be huge. Brink’s has a solid dividend yield of around 3.2%, but it has been lowering its dividend in recent years as it makes strategic acquisitions. It has a price-to-earnings ratio of around 16, but it has a strong balance sheet and a long-term track record of increasing its dividend. BCO experienced a significant drop in value after President Trump’s election, but it has since bounced back and is now trading at a reasonable price for investors.
Brady is a leading commercial and industrial equipment manufacturer and workers’ safety products. It sells its products in more than 100 countries worldwide and has more than 1,000 patents and trademarks. Brady’s primary customer base consists of manufacturing companies, electrical utilities, and local, state, and federal government agencies. The company’s products include bar code scanners, labeling equipment, handheld, and fixed-mount computers, scales, and time and attendance systems. Brady has seen steady growth over the last few years, with its workforce safety and productivity segment currently seeing the most growth. Brady has a strong global presence, with more than 75% of its revenue coming from outside the U.S. It also has a diversified customer base, with the government making up 32% of its sales and industrial/ commercial/retail making up 66%. The company’s stock currently pays an annual dividend of $1.76 per share. It has a price-to-earnings ratio of around 15.2 and a dividend yield of 3.2%. It has been growing its dividend payment since 2008 and has a strong balance sheet. Brady makes a risky but potentially rewarding investment.
IAA, Inc. (IAA)
IAA is a Japanese company that sells security systems and cash management equipment for banks and retailers. Its core product is automated teller machines, or ATMs, primarily for banks in Japan. IAA also offers security products and cash management equipment. The company has seen steady growth in its cash management and ATM segments, but its security segment has declined in sales due to increased competition and declining demand.IAA has a growing presence in South America and China, but it still has a strong foothold in its home market of Japan. It is also making a push into the Middle East, hoping to capitalize on the growing Islamic banking sector. IAA has a reasonable dividend yield of around 3% and a price-to-earnings ratio of around 14.4. It makes a risky but potentially profitable investment that could pay off if the company can expand its reach and increase its sales.
It’s always important to be on the lookout for new investment opportunities. The best stocks to invest in are the ones that are growing and have room to expand further. Commercial services and supplies are a great choice, especially considering they have a wide appeal that can help make wise investments no matter the current economic climate. This sector may not be as predictable as others, but it can still make for a good investment if you do your research.