Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 39.5% gain over the past six months, beating the S&P 500 by 14 percentage points.

Regardless of these results, investors should tread carefully. The diversity of companies in this space means that not all are created equal or well-positioned for the inescapable downturn. Keeping that in mind, here are two resilient industrials stocks at the top of our wish list and one that may face trouble.

One Industrials Stock to Sell:

Lockheed Martin (LMT)

Market Cap: $115.2 billion

Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.

Why Do We Pass on LMT?

1. New orders were hard to come by as its average backlog growth of 7.3% over the past two years underwhelmed
2. Earnings per share fell by 4.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Lockheed Martin’s stock price of $493.25 implies a valuation ratio of 18.1x forward P/E. To fully understand why you should be careful with LMT, check out our full research report (it’s free for active Edge members).

Two Industrials Stocks to Watch:

TransDigm (TDG)

Market Cap: $70.41 billion

Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.

Why Will TDG Beat the Market?

1. Core business can prosper without any help from acquisitions as its organic revenue growth averaged 13% over the past two years
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 24.9% outpaced its revenue gains
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute

At $1,221 per share, TransDigm trades at 32.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.

Gorman-Rupp (GRC)

Market Cap: $1.22 billion

Powering fluid dynamics since 1934, Gorman-Rupp (NYSE: GRC) has evolved from its Ohio origins into a global manufacturer and seller of pumps and pump systems.

Why Are We Positive On GRC?

1. Annual revenue growth of 12.7% over the past five years was outstanding, reflecting market share gains this cycle
2. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
3. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 37.6% annually

Gorman-Rupp is trading at $46.25 per share, or 20.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound 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 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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