Two Top Industrial Stocks to Consider Buying on the ASX Today

2 min read | December 01, 2023 06:56 PM AEDT | By Team Kalkine Media

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When scouting for potential ASX investments, the often overlooked industrial sector holds promising opportunities. Despite its unassuming name, the S&P/ASX 200 Industrials Index (ASX:XNJ) hosts quality shares that have consistently delivered impressive returns to investors. Here, we explore two industrial stocks worthy of consideration. This emphasis on ASX industrial stocks underscores the potential within this sector and encourages investors to explore diverse opportunities for growth and stability in their portfolios.

Transurban Group (ASX: TCL)

Overview:

Transurban operates as a toll road operator, holding a near-monopoly on tolled roads in major Australian cities, including Sydney, Melbourne, and Brisbane. The company also manages projects internationally, particularly in North America.

Investment Thesis:

Defensive Nature: Transurban's toll roads are major arterial routes with few alternatives for motorists, contributing to the company's highly defensive nature.
Inflation-Linked Tolls: The company is typically permitted to increase tolls quarterly to adjust for inflation, providing a consistent revenue stream.
Dividend Growth: Transurban has demonstrated dividend growth, with the previous year's total dividend reaching 52.5 cents per share, a significant increase from 2021's total of 36.5 cents.

Financial Indicators:

Trailing Yield: Transurban shares offer a trailing yield of 4.46%, showcasing the potential for income-focused investors.

Cleanaway Waste Management Ltd (ASX: CWY)

Overview:

Cleanaway Waste Management is a leading ASX-listed waste management company, positioned to benefit from the growing importance of environmental sustainability.

Investment Thesis:

Environmental Sustainability Trend: As awareness of environmental sustainability increases, Cleanaway is well-positioned to capitalize on the growing demand for waste management services.
Market Dominance: As the largest waste management company on the ASX, Cleanaway is a key player in waste collection and recycling services.
Financial Performance: Cleanaway reported an 18.4% increase in gross revenues and a 17.5% rise in EBIT for the 2023 financial year, reflecting strong financial performance.

Outlook:

Long-Term Growth: With the anticipation of sustained growth in waste management importance, Cleanaway is positioned to become substantially larger in the coming years, making it an attractive long-term investment.

Conclusion:

Both Transurban and Cleanaway represent robust industrial stocks with unique strengths. Transurban's defensive nature and inflation-linked tolls provide stability, while Cleanaway's dominance in waste management aligns with the growing emphasis on environmental sustainability. As investors consider opportunities heading into 2024, these industrial stocks merit attention for their growth potential and sector relevance

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