2 Industrials Stocks with Exciting Potential and 1 We Ignore
Whether you see them or not, industrials businesses play a crucial part in our daily activities. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and the industry is currently lagging as its six-month return of 2.3% has trailed the S&P 500’s 12.9% gain.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, 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:
ArcBest (ARCB)
Market Cap: $2.91 billion
Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ:ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.
Why Should You Sell ARCB?
- Underwhelming unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Earnings per share fell by 2.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
ArcBest’s stock price of $129.95 implies a valuation ratio of 16.3x forward P/E. Dive into our free research report to see why there are better opportunities than ARCB.
Two Industrials Stocks to Watch:
Wabtec (WAB)
Market Cap: $46.68 billion
Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE:WAB) provides equipment, systems, and related software for the railway industry.
Why Will WAB Beat the Market?
- Operating margin improvement of 4 percentage points over the last five years demonstrates its ability to scale efficiently
- Share buybacks catapulted its annual earnings per share growth to 18.1%, which outperformed its revenue gains over the last two years
- WAB is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
Wabtec is trading at $276.45 per share, or 24.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Astec (ASTE)
Market Cap: $942 million
Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ:ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.
Why Do We Like ASTE?
- Solid 9.6% annual revenue growth over the last two years indicates its offerings solve complex business issues
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 27.9% annually, topping its revenue gains
At $40.91 per share, Astec trades at 11x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.