Longer-Cycle Businesses Supporting Eaton

Eaton (ETN) has been one of my preferred industrial names for a little while now, partly due to the company’s particular end-market exposures, but also due to what I thought was a general underappreciation of the company’s positive qualities. That position has held up fairly well, as Eaton shares have outperformed its industrial peers over the last six months, including well-loved Honeywell (HON), and continued to report relatively healthy results in an increasingly difficult market.

I do expect Eaton’s growth to slow, but margins are holding up better and I still see some upside in the shares. I always encourage investors to shop around, and I’m a little concerned about overall valuation levels in the sector, but Eaton still looks no worse than okay.

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Longer-Cycle Businesses Supporting Eaton