3 stocks that will outperform the S&P 500 this year and could succeed in 2025

2024 was a very successful year for the stock market, with construction and infrastructure being one of the most prominent areas. Companies that were able to effectively use modern technology and add value to their solutions stood out this year.

Among those that outperformed the S&P 500 and could continue their success in 2025 are Trimble, Johnson Controls and Emerson Electric. Let's take a look at what's behind their growth and what factors could impact their future performance.

Trimble $TRMB: Growth is just beginning

Trimble specializes in technology solutions in positioning systems and software that help streamline construction and infrastructure projects. Its strategy is to combine traditional hardware with cloud-based software platforms. For example, the system Construction One enables construction firms, engineers and other project participants to work with real-time data. This provides better visibility, control and saves time and costs.

The most important segment of the company AECO (architecture, construction, engineering and administration) accounts for 55% of its recurring revenue (ARR) and is growing at a rate in the mid to high double digits. Management anticipates long-term ARR growth in the low to mid-teens percent range, which will translate into solid cash generation. With the digitization of the construction industry just beginning, Trimble has significant room for growth ahead.

Johnson Controls $JCI: Long-term perspective

Johnson Controls is a global leader in engineered building control solutions. Its products include systems for heating, ventilation, air conditioning (HVAC), industrial refrigeration, security technology and fire detection. The company focuses on automation and software to help customers optimize building operations and reduce costs.

At the same time, Johnson Controls is capitalizing on the growing need for smart and energy-efficient solutions in buildings. Digitization and automation are key to improving energy management, emissions reduction and operational efficiency.

Emerson Electric $EMR: The future of automation

Emerson Electric focuses on industrial process automation, software systems and solutions for optimizing factory operations. Its customers include industrial plants such as chemical plants, automotive plants and tire factories. Automation is key to streamlining production, increasing productivity and reducing costs.

Especially at a time when companies are facing pressure to move production back to developed countries, automation is proving to be a solution to the problem of high labour costs. Investment in smart devices and industrial software is becoming an inevitable part of modern manufacturing.

Despite the cyclical challenges in the economy, Emerson Electric is showing steady growth in 2024, which could accelerate in 2025 due to the expected decline in 100-year rates and new industrial investment.

Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.

Source: TheMotleyFool