As global manufacturing gets back on track, suppliers of raw materials, like gases, expect to see an improved outlook over the near and long term. Companies in this area can be easily overlooked, as they tend not to capture news headlines. Most of the players in this area do not produce goods that cater to retail consumers. Instead, they deal almost exclusively with other businesses, the majority of which are from the manufacturing sector. Under the right conditions, however, the business of selling air can potentially be a lucrative investment alternative that investors should consider.

Companies that operate in this space sell gases like oxygen, nitrogen, argon, helium, hydrogen, carbon dioxide, and carbon monoxide. These gasses fulfill a myriad of functions in the industrial sector which include lifting, refrigeration, stabilization, and combustion, to name a few. They also function as mission-critical feedstock for chemical compounds.

With rising global labor costs, companies will continue to look for new ways to improve the productivity of their manufacturing plants. Technological advances in this area often involve the use of gases, which should help boost long-term growth for gas suppliers.

The industrial gases sector is heavily consolidated, and only has a few large players at the moment. Among these, Airgas (ARG), Air Products (APD), and Praxair (PX) lead the pack. They compete with overseas giants like The Linde Group and Air Liquide.

These gas juggernauts have strong balance sheets, and are undoubtedly on the lookout for additional ways to improve their production capacity. In the fourth quarter of 2013, AirGas announced its acquisition of The Encompass Gas Group. This followed Praxair’s acquisition of Acetylene Oxygen Company and NuCO2 earlier in the year.

U.S.-based acquisitions, however, will likely slow as the list of qualified targets gets shorter. Indeed, Praxair saw disappointing returns from its major wave of acquisitions in 2012. Too, Air Products failed in its attempt to buy out AirGas in 2010 for $70 a share. Since then, ARG’s stock has roughly appreciated 50%.

With somewhat limited opportunities on this side of the pond, gas suppliers have also taken their search abroad. Demand from industrial manufacturing is expected to ramp up in the emerging markets. In particular, activity in areas like the BRIC countries will likely accelerate over time. American companies will have to deal with local competitors, but superior technology and decades of expertise ought to provide a solid competitive advantage.

Back in the states, a resurgent energy boom in Texas has fueled greater demand for industrial gases as the U.S. manufacturing sector shows signs of sustainable growth. Likewise, demand for liquid natural gas and LNG technology should also help boost the prospects of these gas specialists. In recent news Air Products opened its new LNG heat exchanger manufacturing facility in Brandenton, Florida. Situated near Port Manatee, this plant will produce equipment destined for overseas customers.

For the most part, the stocks of these gas titans feature good marks for Earnings Predictability and Price Stability. Their dividends also tend to fall in around the median yield for stocks covered by The Value Line Investment Survey. These companies have a long history of profitability and will continue to play a role in the global economic recovery. Barring another global economic meltdown, they should continue their steady march upwards. While the issues are not immune to economic downturns, they represent a risk-mitigated alternative for conservative accounts. Although growth over the next 3- to 5-years will come with some challenges, these stocks have potential that is very enticing, especially if they can be found at a discounted valuation. Investors who believe in a return to higher global manufacturing levels will want to consider hitching a ride on these air companies to greener pastures.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.