Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 16.3% gain over the past six months, beating the S&P 500 by 8.3 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. With that said, here are two industrials stocks we think can generate sustainable market-beating returns and one we’re steering clear of.
One Industrials Stock to Sell:
Owens Corning (OC)
Market Cap: $9.78 billion
Credited with the discovery of fiberglass, Owens Corning (NYSE: OC) supplies building and construction materials to the United States and international markets.
Why Do We Pass on OC?
- Muted 2.5% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 17% annually while its revenue grew
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Owens Corning is trading at $146.50 per share, or 14.7x forward P/E. Read our free research report to see why you should think twice about including OC in your portfolio.
Two Industrials Stocks to Watch:
Badger Meter (BMI)
Market Cap: $3.81 billion
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE: BMI) provides water control and measure equipment to various industries.
Why Do We Love BMI?
- Impressive 15.6% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 20.3% outpaced its revenue gains
- Robust free cash flow margin of 15.8% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
At $149.00 per share, Badger Meter trades at 31x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
FTAI Infrastructure (FIP)
Market Cap: $564.8 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?
- Annual revenue growth of 35% over the past two years was outstanding, reflecting market share gains this cycle
- Expected revenue growth of 19.6% for the next year suggests its market share will rise
FTAI Infrastructure’s stock price of $4.54 implies a valuation ratio of 13.2x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
