5 Stocks to Buy as U.S. Manufacturing Activities Show Signs of Rebound

The U.S. manufacturing sector has struggled over the past three years but appears to be making a solid comeback. Although high prices and a shrinking labor market remain major concerns, demand has been on the rise lately, which is boosting manufacturing activity.

The Zacks-defined Manufacturing – General Industrial industry is currently in the top 27% of the Zacks Industry Rank. Since the Manufacturing – General Industrial industry is ranked in the top half of the Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.

Given the positive sentiment, it would be ideal to invest in five stocks from the manufacturing industry with a favorable Zacks Rank. These are: Parker-Hannifin Corp. PH, Nordson Corp. NDSN, Watts Water Technologies Inc. WTS, Flowserve Corp. FLS and Trimble Inc. TRMB. Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

U.S. Manufacturing Activities Show Signs of Rebound

ISM Manufacturing PMI (purchasing managers’ Index) expanded in February for the second straight month. The index for February came in at 52.4%, slightly below January’s metric of 52.6% but well above the Zacks Consensus Estimate of 51.6%. The New Orders Index expanded for the second straight month to 55.8% last month after contracting for four straight months.

In January, the ISM Manufacturing Index showed that the PMI reading jumped to 52.6% from 47.9% in December. This marked the strongest reading since 2022, with the sector growing for the first time in a year.

The New Orders Index surged to 57.1% in January from 47.4% in December, reaching its highest level since February 2022 and posting its first increase since August 2025. Any reading above 50% indicates expansion in manufacturing activities.

The chart below shows the price performance of our five picks year to date.

Image Source: Zacks Investment Research

Parker-Hannifin Corp.

Parker-Hannifin is benefiting from steady demand in the commercial and military end markets across both OEM and aftermarket channels within the Aerospace segment. The accretive acquisitions spark optimism in the stock.

The Win strategy is driving PH’s margins and allowing the company to continue returning value to shareholders. In April 2025, PH hiked its quarterly dividend rate by 10% to $1.80 per share. Acquired assets are another positive factor driving its top line.

Parker-Hannifin has an expected revenue and earnings growth rate of 7.1% and 13.2%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.7% over the past 30 days.

Nordson Corp.

Nordson is well-positioned to benefit from the solid momentum in the Medical and Fluid Solutions segment. NDSN’s strong customer demand for the packaging, nonwovens, precision agriculture and consumer non-durable product lines is aiding the company.

NDSN’s commitment to rewarding its shareholders through dividend payouts and share repurchases is encouraging. NDSN aims to expand its market share, product offerings and customer base through strategic acquisitions.

Nordson has an expected revenue and earnings growth rate of 4.9% and 10.8%, respectively, for the current year (ending October 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 1.4% over the past 30 days.

Watts Water Technologies Inc.

Watts Water’s performance is benefiting from synergies from acquisitions. WTS recently completed the acquisitions of Haws Corporation, Superior Boiler and Saudi Cast. For 2026, WTS anticipates more than $130 million in incremental revenues from EasyWater, Haws, Superior and Saudi Cast.

WTS is also gaining from aggressive cost-reduction actions. A strong balance sheet and cash generation are facilitating healthy capital deployment actions. For 2026, WTS expects operating margin in the range of 18.8–19.4%, and adjusted operating margin to be between 19.1% and 19.7%.

Watts Water has an expected revenue and earnings growth rate of 10.9% and 9.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 3% over the past 30 days.

Flowserve Corp.

Flowserve is gaining from strength across its segments. The Flowserve Pump Division segment is particularly strong, driven by solid momentum in the aftermarket business. The increase in bookings across the energy and general industries end markets is aiding the Flow Control Division’s performance.

Strength across end markets, along with FLS’ Diversify, Decarbonize and Digitize (3D) strategy, is driving its booking levels. Benefits from acquired assets are driving FLS’ performance of late. Its measures to reward its shareholders are encouraging.

Flowserve has an expected revenue and earnings growth rate of 6.3% and 12.9%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.5% over the past 30 days.

Trimble Inc.

Trimble benefits from strong growth in its recurring revenue streams, particularly in its AECO and Field Systems segments, with increased customer adoption of its digital solutions and AI-driven innovation. TRMB’s significant growth in its ARR is a major positive.

TRMB also benefits from its “Connect and Scale” approach, which has strengthened its business model and product offerings, particularly in construction, geospatial, and transportation markets. TRMB remains focused on software-driven revenue streams and AI-powered solutions to drive future growth.

Trimble has an expected revenue and earnings growth rate of 7.6% and 12.8%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 2.6% over the past 30 days.

Quantum Computing Stocks Set To Soar

Artificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.

Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.

Access the Report Free Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Parker-Hannifin Corporation (PH): Free Stock Analysis Report

Flowserve Corporation (FLS): Free Stock Analysis Report

Trimble Inc. (TRMB): Free Stock Analysis Report

Nordson Corporation (NDSN): Free Stock Analysis Report

Watts Water Technologies, Inc. (WTS): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research