The industrial sector includes companies that produce machinery, equipment, and supplies that are used in construction and manufacturing, as well as those that provide related services. These companies are closely tied to the economy, and their business volume often falls sharply during recessions, though each industrial subsector often performs differently. Well-known companies include Lockheed Martin Corp. (LMT), Honeywell International Inc. (HON), and 3M Co. (MMM). The industrial sector also includes companies that provide air transportation services such as United Airlines Holdings Inc. (UAL).
Industrial stocks, represented by the Industrial Select Sector SPDR ETF (XLI), have outperformed the broader market, providing investors with a total return of 64.7% compared to the Russell 1000’s total return of 52.8% over the past 12 months. These market performance numbers and all statistics in the tables below are as of April 20, 2021.
Here are the top 3 industrial stocks with the best value, the fastest growth, and the most momentum.
These are the industrial stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
| Best Value Industrial Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| GrafTech International Ltd. ( EAF) |
11.52 | 3.1 | 7.1 |
| Air Lease Corp. ( AL) |
46.40 | 5.3 | 10.6 |
| Huntington Ingalls Industries Inc. ( HII) |
207.57 | 8.4 | 12.1 |
Source: YCharts
- GrafTech International Ltd.: GrafTech manufactures graphite and carbon-based products and offers related services. Among the company’s products are graphite electrodes, petroleum needle coke, and energy solutions for making steel, silicon metal, electronics, aluminum, and automotive products.
- Air Lease Corp.: Air Lease buys, sells, and leases commercial aircraft. It also provides fleet management services. The company serves airline customers worldwide. Air Lease announced in late February financial results for its 2020 fiscal year (FY), which ended Dec. 31, 2020. Net income available to common stockholders fell 12.9% for the year as annual revenue declined 0.1%. The company said that it was the toughest year ever for the global airline industry due to the COVID-19 pandemic’s adverse impact on travel. It expects the difficult environment to continue for most of the rest of this year.
- Huntington Ingalls Industries Inc.: Huntington Ingalls is a shipbuilding company. It designs, builds, and maintains nuclear and non-nuclear ships for the U.S. Navy and Coast Guard. The company also provides various professional services, including fleet support, oil and gas services, and more.
These are the top industrial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
| Fastest Growing Industrial Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Ingersoll Rand Inc. ( IR) |
50.34 | 21.1 | 200.0 | 149.4 |
| Amerco Inc. ( UHAL) |
598.08 | 11.7 | 490.5 | 26.1 |
| Kirby Corp. ( KEX) |
60.40 | 3.6 | 640.0 | -25.3 |
Source: YCharts
- Ingersoll Rand Inc.: Ingersoll Rand manufactures flow control equipment, including vacuum systems, compressors, pumps, loading systems, power tools, and blower products. The company also designs and manufactures golf, utility, and consumer low-speed vehicles through its Club Car brand. Ingersoll Rand announced in mid-April that it has agreed to sell Club Car to global private equity firm Platinum Equity LLC in an all-cash transaction valued at $1.68 billion. The transaction is expected to be completed by the third quarter of 2021.
- Amerco Inc.: AMERCO is a diversified holding company. It owns U-Haul, which offers rental of trucks, trailers, and storage space, and sells various moving products like boxes and tape. The company also offers various types of insurance and related products through several subsidiaries.
- Kirby Corp.: Kirby operates a fleet of tank barges that transport bulk liquid products, including industrial chemicals, refined petroleum products, black oil products, and agricultural chemicals. The company also overhauls and services diesel engines used in marine, power generation, and rail applications.
These are the industrial stocks that had the highest total return over the last 12 months.
| Industrial Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| The Middleby Corp. ( MIDD) |
166.83 | 9.3 | 243.6 |
| Generac Holdings Inc. ( GNRC) |
313.77 | 19.7 | 215.8 |
| United Rentals Inc. ( URI) |
310.74 | 22.5 | 208.9 |
| Russell 1000 | N/A | N/A | 52.8 |
| Industrial Select Sector SPDR ETF (XLI) | N/A | N/A | 64.7 |
Source: YCharts
- The Middleby Corp.: Middleby designs and manufactures equipment for cooking and food preparation in restaurants as well as commercial and institutional kitchens. The company recently announced that it has agreed to acquire Welbilt Inc. (WBT), a provider of commercial foodservice equipment. The all-stock transaction valued at around $4.3 billion is expected to close in late 2021.
- Generac Holdings Inc.: Generac designs and manufactures power generation equipment and other engine powered products. It provides automatic, stationary standby, and portable generators for a range of markets worldwide.
- United Rentals Inc.: United Rentals is an equipment rental company with a network of locations throughout the U.S. and Canada. The company offers rentals to businesses in the construction industry, industrial and commercial firms, as well as homeowners and other individuals. United Rentals announced in mid-April that it has agreed to acquire General Finance Corp. (GFN) in a cash transaction valued at approximately $1.0 billion. General Finance provides mobile storage and modular office space. The transaction is expected to close in the second quarter of 2021. The announcement comes a day after United Rentals announced that it acquired Franklin Equipment LLC, a regional provider of equipment rentals. The financial terms of the transaction were not disclosed.
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