Barring a collapse in corporate and consumer confidence, the current slow but steady economic growth should continue, with some strong evidence that smokestack America will lead the way. Not coincidentally, one area of the equity markets that has grabbed attention of late due the emergent strength of its key indicators and macro drivers is industrials. The institutional research team at Oppenheimer have become increasingly confident in industrials as a means to generate relative outperformance during the latter stages of the current economic cycle.

In a new research report, the Oppenheimer team points out that after lagging their sector peers for much of 2013, industrials have emerged as a leader in the second half of the year, boosted by a stabilizing domestic and global manufacturing backdrop. Strong U.S. auto sales and real estate have helped to strengthen domestic manufacturing. We saw key research showing that some top steel stocks may have gained some life due to manufacturing gains.

The Oppenheimer institutional portfolio analysts screened for the top industrial stocks to buy that may provide strong gains the rest of the year and into 2014.

Cummins Inc. (NYSE: CMI) designs, manufactures, distributes and services diesel and natural gas engines, as well as engine-related component products. It operates in four segments: Engine, Components, Power Generation and Distribution. Investors receive a 1.8% dividend. The Thomson/First Call price target for the stock is $139. Cummins closed Tuesday at $138.18.

Ingersoll-Rand PLC (NYSE: IR) posted good earnings last Friday, buoyed by the ongoing strength of the U.S. housing market. With well-known product names like American Standard, Schlage and Trane, the company is expected to excel in commercial construction in 2014. Shareholders are paid a 1.3% dividend. The consensus price target for the stock is $67, but it closed Tuesday at $68.29.

Dover Corp. (NYSE: DOV) manufactures and sells a range of specialized products and components, and it provides related consumables and services. The company operates in four segments: Communication Technologies, Energy, Engineered Systems and Printing and Identification. The company’s solid third-quarter results were “driven by broad-based organic growth across all segments,” including the company’s oil drilling and downstream markets within its energy unit, its refrigeration and food equipment markets, and its printing and identification segment, CEO Robert Livingston said. Investors receive a 1.7% dividend. The consensus price target for the stock is $97. Dover closed Tuesday at $90.41.

3M Co. (NYSE: MMM) is an industrial conglomerate that fits the bill at Oppenheimer. The company has posted increasing profit for three quarters in a row. The 3% year-over-year growth in net income in the most recent quarter came after a slight profit growth in the first quarter and the 4% rise in the fourth quarter. The company will report third-quarter earnings Thursday. Investors receive a 2.1% dividend. The consensus price target for the stock is $121, and 3M closed Tuesday at $123.80.

Trinity Industries Inc. (NYSE: TRN) is another industrial name and is favored by CNBC’s Jim Cramer. The company provides products and services to the industrial, energy, transportation and construction sectors, primarily in the United States, Canada, Mexico, the United Kingdom, Singapore and Sweden. The consensus price target for the stock is posted at $47. Investors are paid a 1.3% dividend.

Danaher Corp. (NYSE: DHR) posted solid third-quarter results, with growth driven by a strong acceleration in Life Sciences & Diagnostics and improved Environmental and Dental growth countering another soft quarter from Industrial Tech and Test & Measurement. This is another industrial conglomerate play that is favored by Oppenheimer. The consensus price objective for the stock is $79. Danaher closed Tuesday at $72.24.

FedEx Corp. (NYSE: FDX) makes the list as an attractive air freight and logistics stock to buy. Oppenheimer sees shipping and transport working in lockstep as the industrials gain even more ground through manufacturing growth. Investors are paid a small 0.5% dividend. The consensus price target for the stock, which recently hit all-time highs, is $114. FedEx closed Tuesday at $129.69.

ITT Corp. (NYSE: ITT) designs and manufactures engineered critical components and customized technology solutions for the energy, transportation and industrial markets. The company operates in four segments: Industrial Process, Motion Technologies, Interconnect Solutions and Control Technologies.  Investors are paid a 1.1% dividend. The consensus price objective is set at $38, and ITT closed Tuesday at $37.30.

E.I. du Pont de Nemours & Co. (NYSE: DD) was raised to Overweight Wednesday morning at J.P. Morgan. The company had outstanding earnings and is benefiting from the strong manufacturing growth in the United States and abroad. DuPont is another stock that fits into the diversified conglomerate category. Shareholders are paid a solid 3% dividend. The consensus price target for the stock is $59, but DuPont closed Tuesday at $60.17.

The Oppenheimer thesis makes extremely good sense for investors. Growth, although steady, is still way below historical norms. Years of cost cutting and restructuring have made many of the top industrial stocks leaner and more qualified to compete globally. Plus, the howls from the manufacturing bears on Wall Street have proven to be wrong. One thing for investors to consider is patience. All of the top Oppenheimer recommendations are trading at or near target highs. Waiting for a market pullback may provide a much more attractive entry point to these solid stocks to buy.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.