Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But this role also comes with a demand profile tethered to the ebbs and flows of the broader economy. Thankfully, industrial end markets were stable over the past six months as the industry’s 16.2% gain has nearly mirrored the S&P 500.
Although these companies have produced results lately, a cautious approach is imperative. When the cycle naturally turns, the losers can be left for dead while the winners consolidate and take more of the market. Keeping that in mind, here are three industrials stocks we think can generate sustainable market-beating returns.
Quanta (PWR)
Market Cap: $67.02 billion
A construction engineering services company, Quanta (NYSE: PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.
Why Are We Backing PWR?
- Backlog has averaged 16.7% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Forecasted revenue growth of 12.5% for the next 12 months indicates its momentum over the last two years is sustainable
- Earnings per share grew by 24.3% annually over the last two years and trumped its peers
Quanta is trading at $448.74 per share, or 37.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Hubbell (HUBB)
Market Cap: $24.07 billion
A respected player in the electrical segment, Hubbell (NYSE: HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Why Is HUBB a Top Pick?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin jumped by 5.9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Hubbell’s stock price of $452.99 implies a valuation ratio of 23.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
AAR (AIR)
Market Cap: $3.31 billion
The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE: AIR) is a provider of aircraft maintenance services
Why Are We Fans of AIR?
- Market share has increased this cycle as its 16.8% annual revenue growth over the last two years was exceptional
- Estimated revenue growth of 11% for the next 12 months implies its momentum over the last two years will continue
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 18.9% annually
At $83.00 per share, AAR trades at 10.6x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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