Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 28.1% gain over the past six months, beating the S&P 500 by 9.3 percentage points.
Regardless of these results, investors should tread carefully. The diversity of companies in this space means that not all are created equal or well-positioned for the inescapable downturn. On that note, here is one resilient industrials stock at the top of our wish list and two we’re swiping left on.
Two Industrials Stocks to Sell:
Hertz (HTZ)
Market Cap: $2.11 billion
Started with a dozen Model T Fords, Hertz (NASDAQ: HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.
Why Do We Steer Clear of HTZ?
- Disappointing unit sales over the past two years imply it may need to invest in improvements to get back on track
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $6.83 per share, Hertz trades at 3.9x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than HTZ.
Rivian (RIVN)
Market Cap: $17.81 billion
The manufacturer of Amazon’s delivery trucks, Rivian (NASDAQ: RIVN) designs, manufactures, and sells electric vehicles and commercial delivery vans.
Why Does RIVN Give Us Pause?
- Negative 49.3% gross margin means it loses money on every sale and must pivot or scale quickly to survive
- Cash-burning history makes us doubt the long-term viability of its business model
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Rivian’s stock price of $14.66 implies a valuation ratio of 3x forward price-to-sales. Read our free research report to see why you should think twice about including RIVN in your portfolio.
One Industrials Stock to Buy:
FTAI Aviation (FTAI)
Market Cap: $17.11 billion
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ: FTAI) sells, leases, maintains, and repairs aircraft engines.
Why Do We Love FTAI?
- Impressive 41.4% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 67% annually, topping its revenue gains
- Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day
FTAI Aviation is trading at $166 per share, or 30.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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