The Dow Jones Industrial Average has entered correction territory, prompting investors to seek stability in companies with strong physical assets and infrastructure. Honeywell (HON) and Emerson Electric (EMR) stand out as two industrial stocks with solid dividend yields and a focus on automation, making them attractive options in the current market environment.
Both companies are undergoing significant transformations to concentrate on high-growth areas, particularly industrial automation. Honeywell plans to spin off its aerospace division later this year, a move analysts believe could enhance its value by creating a pure-play industrial automation entity. Meanwhile, Emerson has already shifted its focus, divesting from legacy businesses to concentrate on automation technologies for factories and power plants. Emerson boasts a 69-year history of dividend increases, appealing to conservative investors, while Honeywell offers a 2% yield and potential upside from its upcoming spinoff.
Investors should weigh their strategies: Honeywell may offer greater upside potential with its ongoing transformation, while Emerson provides a more stable income stream with its established dividend history.
Source: fool.com