Tops for 2020: The 5 Best Industrial Stocks to Buy

While frequently overlooked, industrial stocks held their own throughout 2019 and appear to be in strong position heading into 2020.

The ongoing U.S.-Chinese trade war hasn't exactly been easy for American industrial companies, which on average derive more than a third of their revenues from China, and many of which order supplies from the country as well. Nonetheless, the Industrial Select Sector SPDR Fund (XLI) actually boasted slightly better returns than the S&P 500 year-to-date through Dec. 3. The sector is set up to beat the Street next year, too.

Barry Bannister, head of institutional equity strategy at Stifel Nicolaus, suggesting that investors buy into cyclical stocks such as industrials while shedding defensive plays. "Although we see (more than) 5% further for the S&P 500 into 2020, we see twice that return, or plus 10%, for a long-cyclical/short defensive industry trade in the same period," he writes.

Given that industrial stocks still face trade risks, however, investors are