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 investors seem to be forecasting a downturn - over the past six months, the industry has pulled back by 2.4%. This drop was disappointing since the S&P 500 climbed 1.1%.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here are two industrials stocks boasting durable advantages and one best left ignored.

One IndustrialsStock to Sell:

Fastenal (FAST)

Market Cap: $47.6 billion

Founded in 1967, Fastenal (NASDAQ: FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.

Why Are We Wary of FAST?

1. Muted 3.3% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Incremental sales over the last two years were less profitable as its 1.5% annual earnings per share growth lagged its revenue gains
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6 percentage points

Fastenal’s stock price of $41.18 implies a valuation ratio of 37.7x forward P/E. Check out our free in-depth research report to learn more about why FAST doesn’t pass our bar.

Two Industrials Stocks to Watch:

Rollins (ROL)

Market Cap: $27.18 billion

Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE: ROL) provides pest and wildlife control services to residential and commercial customers.

Why Is ROL a Top Pick?

1. Annual revenue growth of 11.9% over the past two years was outstanding, reflecting market share gains this cycle
2. Superior product capabilities and pricing power result in a best-in-class gross margin of 52.1%
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Rollins is trading at $56.08 per share, or 48.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

KBR (KBR)

Market Cap: $6.85 billion

Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.

Why Are We Positive On KBR?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 10.3% annual sales growth over the last two years
2. Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 15.8% exceeded its revenue gains over the last five years

At $52.78 per share, KBR trades at 13.7x forward P/E. Is now the right 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 9 Market-Beating Stocks. 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).

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