Industrials or technology—where is the better place for investors? Kim Caughey, VP and senior equity analyst and assistant portfolio manager at Fort Pitt Capital Group and Marc Pado, U.S. market strategist at Cantor Fitzgerald discussed their investment advice.
“I like the business software [companies] because we have to look at the rebuild cycle,” Pado told CNBC.
“We haven’t seen a big upgrade since Y2K, and productivity’s what’s moving us higher...You benefit without jobs because you increase productivity and you can only get there with technology.”
Pado said technology is likely to be one of the main focuses of future M&A activity and expects the sector to lead the fourth quarter rally.
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In the meantime, Caughey said she prefers the industrials as the developing world continues to develop, regardless of the worldwide recession.
“They’re on sale right now in the developing world and that’s why we like industrials,” she said. “More than that, these companies have the best of world products and that’s why we like them. So regardless of their relative cost, their customers will still be their customers.”
CNBC Data Pages:
Caughey added that many of the U.S.-based industrials have reasonable dividend yields.
“I do like technology as well," she said. "But industrials pay you to own them and techs not so much, and we like those dividend-paying stocks—and you can’t say that for tech,” she said.
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CNBC Slideshows:
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Top Business Software Companies:
IBM
Accenture
Hewlett-Packard
Microsoft
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Disclosures:
No immediate information was available for Caughey or Pado.
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