Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and the industry is currently lagging as its six-month return of 3% has trailed the S&P 500’s 5.4% gain.

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. On that note, here are two industrials stocks we think can generate sustainable market-beating returns and one that may face trouble.

One Industrials Stock to Sell:

Sealed Air (SEE)

Market Cap: $4.37 billion

Founded in 1960, Sealed Air Corporation (NYSE: SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.

Why Do We Avoid SEE?

1. Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
2. Sales were less profitable over the last two years as its earnings per share fell by 7.5% annually, worse than its revenue declines
3. Waning returns on capital imply its previous profit engines are losing steam

At $29.73 per share, Sealed Air trades at 9.8x forward P/E. If you’re considering SEE for your portfolio, see our FREE research report to learn more.

Two Industrials Stocks to Watch:

Republic Services (RSG)

Market Cap: $72.4 billion

Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.

Why Could RSG Be a Winner?

1. Annual revenue growth of 9.8% over the last five years beat the sector average and underscores the unique value of its offerings
2. Highly efficient business model is illustrated by its impressive 18.8% operating margin, and its rise over the last five years was fueled by some leverage on its fixed costs
3. Robust free cash flow margin of 13.5% gives it many options for capital deployment

Republic Services is trading at $231 per share, or 32.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Thermon (THR)

Market Cap: $935.7 million

Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.

Why Does THR Stand Out?

1. Offerings are mission-critical for businesses and lead to a top-tier gross margin of 42.8%
2. Operating margin improvement of 11.6 percentage points over the last five years demonstrates its ability to scale efficiently
3. Additional sales over the last five years increased its profitability as the 20.9% annual growth in its earnings per share outpaced its revenue

Thermon’s stock price of $28.28 implies a valuation ratio of 13.9x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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 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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