Whether you see them or not, industrials businesses play a crucial part in our daily activities. But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates), and the market seems convinced that demand will slow. Due to this bearish outlook, the industry has tumbled by 5.7% over the past six months. This drawdown was disheartening since the S&P 500 held steady.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. With that said, here are two resilient industrials stocks at the top of our wish list and one best left ignored.
One Industrials Stock to Sell:
United Parcel Service (UPS)
Market Cap: $85.8 billion
Trademarking its recognizable UPS Brown color, UPS (NYSE: UPS) offers package delivery, supply chain management, and freight forwarding services.
Why Should You Dump UPS?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $99.19 per share, United Parcel Service trades at 12.9x forward P/E. Dive into our free research report to see why there are better opportunities than UPS.
Two Industrials Stocks to Watch:
Powell (POWL)
Market Cap: $2.21 billion
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE: POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Why Does POWL Stand Out?
- Impressive 34.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings per share grew by 209% annually over the last two years and trumped its peers
Powell’s stock price of $182.40 implies a valuation ratio of 12.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Axon (AXON)
Market Cap: $57.08 billion
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Will AXON Outperform?
- Unit sales averaged 32% growth over the past two years and imply healthy demand for its products
- Free cash flow margin expanded by 20.3 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Axon is trading at $749 per share, or 124.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 176% over the last five years.
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
