Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But their prominence also brings high exposure to the ups and downs of economic cycles. Luckily, the tide is turning in their favor as the industry’s 22% return over the past six months has topped the S&P 500 by 16 percentage points.
Although these companies have produced results lately, a cautious approach is imperative. When the cycle naturally turns, the losers can be left for dead while the winners consolidate and take more of the market. Keeping that in mind, here are two resilient industrials stocks at the top of our wish list and one we’re steering clear of.
One Industrials Stock to Sell:
IDEX (IEX)
Market Cap: $15.75 billion
Founded in 1988, IDEX (NYSE: IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.
Why Do We Pass on IEX?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings per share fell by 1.7% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- Eroding returns on capital suggest its historical profit centers are aging
IDEX is trading at $210.41 per share, or 25.5x forward P/E. Dive into our free research report to see why there are better opportunities than IEX.
Two Industrials Stocks to Buy:
Powell (POWL)
Market Cap: $7.10 billion
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE: POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Why Is POWL a Good Business?
- Average backlog growth of 15.4% over the past two years shows it has a steady sales pipeline that will drive future orders
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 58.2% annually, topping its revenue gains
- Free cash flow margin expanded by 22 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $587.34 per share, Powell trades at 34.3x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Mueller Water Products (MWA)
Market Cap: $4.71 billion
As one of the oldest companies in the water infrastructure industry, Mueller (NYSE: MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Why Will MWA Outperform?
- Operating margin improvement of 7.1 percentage points over the last five years demonstrates its ability to scale efficiently
- Additional sales over the last two years increased its profitability as the 45.2% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 4.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Mueller Water Products’s stock price of $30.38 implies a valuation ratio of 20.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
