The past few years has seen the end of the globalization trend. A push for more local supply chains has been a key reason why. Now, with a rise in global tariffs, not just coming from the United States, a further push for domestic production is likely.
That’s good news for some American manufacturing firms. They’ve had to compete with global competitors, who often benefit from lower wages or more government support.
But great American companies, like Carrier (CARR), are able to compete globally despite being based in the Untied States. That may be why shares have been trending higher, up 15% over the past year.
However, the producer of home ventilation and heating and cooling systems has declined in recent months along with the overall market.
Nevertheless, shares are attractively valued at 22 times forward earnings, and the manufacturer sports a 25% profit margin, a phenomenal return for an industrial play.
Action to take: Investors may want to accumulate shares here, as the stock may restart its long-term uptrend as current market fears fade.
Currently, Carrier pays a 1.3% dividend, and has a history of increasing its payout over time.
For traders, if the market starts to recover, Carrier shares should break higher. The June $70 calls, last trading for about $2.35, could see mid-to-high double-digit returns going into the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.