1 Industrials Stock for Long-Term Investors and 2 We Avoid
Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the industry’s six-month return of 5% has fallen short of the S&P 500’s 13.3% rise.
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 is one industrials stock boasting a durable advantage and two that may face trouble.
Two Industrials Stocks to Sell:
Concrete Pumping (BBCP)
Market Cap: $525.6 million
Going public via SPAC in 2018, Concrete Pumping (NASDAQ:BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Why Do We Think Twice About BBCP?
- Sales tumbled by 1.4% annually over the last two years, showing market trends are working against it during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $10.45 per share, Concrete Pumping trades at 33.9x forward P/E. To fully understand why you should be careful with BBCP, check out our full research report (it’s free).
Republic Services (RSG)
Market Cap: $68.21 billion
Processing several million tons of recyclables annually, Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.
Why Is RSG Not Exciting?
- The company has faced growth challenges as its 4.2% annual revenue increases over the last two years fell short of other industrials companies
- Flat unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.8%
Republic Services’s stock price of $223.56 implies a valuation ratio of 29x forward P/E. Read our free research report to see why you should think twice about including RSG in your portfolio.
One Industrials Stock to Buy:
Gorman-Rupp (GRC)
Market Cap: $1.97 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 Do We Love GRC?
- Annual revenue growth of 14.7% over the last five years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 28% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 12.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Gorman-Rupp is trading at $74.42 per share, or 24.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.