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 12.1% over the past six months. This drawdown was worse than the S&P 500’s 5.2% decline.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, here is one resilient industrials stock at the top of our wish list and two we’re passing on.

Two Industrials Stocks to Sell:

Silgan Holdings (SLGN)

Market Cap: $5.50 billion

Established in 1987, Silgan Holdings (NYSE: SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.

Why Are We Out on SLGN?

1. Sales tumbled by 4.4% annually over the last two years, showing market trends are working against its favor during this cycle
2. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

Silgan Holdings’s stock price of $51.44 implies a valuation ratio of 12.6x forward price-to-earnings. Check out our free in-depth research report to learn more about why SLGN doesn’t pass our bar.

Rush Enterprises (RUSHA)

Market Cap: $4.25 billion

Headquartered in Texas, Rush Enterprises (NASDAQ: RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.

Why Do We Pass on RUSHA?

1. Annual revenue growth of 4.8% over the last two years was below our standards for the industrials sector
2. Earnings per share have dipped by 7.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. 9.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Rush Enterprises is trading at $51.18 per share, or 13.3x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than RUSHA.

One Industrials Stock to Buy:

Core & Main (CNM)

Market Cap: $9.98 billion

Formerly a division of industrial distributor HD Supply, Core & Main (NYSE: CNM) is a provider of water, wastewater, and fire protection products and services.

Why Is CNM a Top Pick?

1. Annual revenue growth of 17% over the past five years was outstanding, reflecting market share gains this cycle
2. Operating margin expanded by 4.7 percentage points over the last five years as it scaled and became more efficient
3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 60.2% exceeded its revenue gains over the last five years

At $52.53 per share, Core & Main trades at 21.6x forward price-to-earnings. Is now the right time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.