Whether you see them or not, industrials businesses play a crucial part in our daily activities. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 11.8% over the past six months. This drop was worse than the S&P 500’s 2.2% fall.

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 is one industrials stock boasting a durable advantage and two we’re steering clear of.

Two IndustrialsStocks to Sell:

Huntington Ingalls (HII)

Market Cap: $8.78 billion

Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.

Why Do We Steer Clear of HII?

1. Backlog growth averaged a weak 1.8% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.2 percentage points
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $223.51 per share, Huntington Ingalls trades at 15.8x forward P/E. Read our free research report to see why you should think twice about including HII in your portfolio.

Ford (F)

Market Cap: $40.64 billion

Established to make automobiles accessible to a broader segment of the population, Ford (NYSE: F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.

Why Should You Sell F?

1. Flat vehicles sold over the past two years imply it may need to invest in improvements to get back on track
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 13.4 percentage points
3. 8× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Ford is trading at $10.22 per share, or 7.5x forward P/E. Dive into our free research report to see why there are better opportunities than F.

One Industrials Stock to Watch:

FTAI Infrastructure (FIP)

Market Cap: $698.9 million

Spun off from FTAI Aviation in 2021, FTAI Infrastructure (NASDAQ: FIP) invests in and operates infrastructure and related assets across the transportation and energy sectors.

Why Do We Like FIP?

1. Annual revenue growth of 33.3% over the past three years was outstanding, reflecting market share gains this cycle
2. Market share is on track to rise over the next 12 months as its 78.2% projected revenue growth implies demand will accelerate from its two-year trend

FTAI Infrastructure’s stock price of $6.08 implies a valuation ratio of 2.6x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

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 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.