Wall Street Overlooked This Industrial Stock. Down 14%, It's Now a Forever Buy.

Helped in part by renewed enthusiasm for defense stocks and increasing intersections with technology, including artificial intelligence (AI), the industrial sector isn't as stodgy as it used to be.

Admittedly, that's painting in broad strokes, and there are some things for investors to keep in mind about this group. The S&P 500 Industrials Sector comprises a dozen industry groups, but not all are glitz and glamor. Sure, there's no arguing that certain aerospace and defense stocks have pizazz, and some machinery names, such as Caterpillar and Deere, are equally charismatic in investment terms.

However, the industrial sector still includes some stocks that investors may perceive as boring. Illinois Tool Works (NYSE: ITW) fits that bill. Well, most of the time. Its 14.6% pullback from its 52-week high isn't boring. It's painful, but that decline may also spell opportunity for investors looking to get involved in an industrial stock for the long term.

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Is ITW worth marrying?

Adaptability is a trait shared by many of history's greatest, but that doesn't mean they shied away from commitment. Case in point: Some Warren Buffett investments, such as American Express and Coca-Cola, are considered "forever" names by Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB).

Dubbing Illinois Tool Works a "Buffett stock" may be a bridge too far because it's not a Berkshire holding. Still, some market observers have gone down the road of saying this industrial name meets some of the criteria the "Oracle of Omaha" looked for when he was running Berkshire. As one example, Illinois Tool Works, like American Express and Coca-Cola, has a wide economic moat.

Wide-moat investing works, as stocks with that designation often outperform their narrow- or no-moat counterparts over extended holding periods. That's not a guarantee Illinois Tool Works will do the same, but that history may make it a bit easier for investors to commit to this stock.

Importantly, there's support for the moat, and it's arguably not discussed enough in Wall Street circles. Illinois Tool Works is essentially a problem solver for clients in a wide array of industries, including automotive equipment and manufacturing, electronics, food equipment, and testing. Those aren't glamorous businesses, but Illinois Tool Works benefits from high switching costs that would confound clients if they left.

More forever hallmarks

Whether it's life in general or investing, "forever" is a big commitment, but Illinois Tool Works gives investors reasons beyond those mentioned above to consider putting a ring on it. For example, the company outperforms publicly traded rivals in the automotive manufacturing and food equipment segments, implying a level of superiority that keeps clients devoted.

It's also nice to get a dowry when tying the knot, and Illinois Tool Works delivers just that in the form of a dividend that's increased tenfold over the past 20 years. The overall dividend increase streak spans 62 years, and the company is also a dedicated buyer of its own shares.

That payout and its potential growth are supported by the company's ability to identify cost savings and a track record of shedding some lagging businesses over the years.

American Express is an advertising partner of Motley Fool Money. Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Caterpillar, and Deere & Company. The Motley Fool recommends Illinois Tool Works. The Motley Fool has a disclosure policy.