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, as represented by the Industrial Select Sector SPDR ETF (XLI), have outperformed the broader market, providing investors with a total return of 75.9% compared to the Russell 1000's total return of 66.1% over the past 12 months. These market performance numbers and all data below are as of March 24, 2021.

Here are the top 3 industrial stocks with the best value, the fastest earnings growth, and the most momentum.

Best Value Industrial Stocks

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) 11.22 3.0 6.9
Air Lease Corp. ( AL) 46.67 5.3 10.6
Huntington Ingalls Industries Inc. ( HII) 194.12 7.8 11.4

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. The company serves airline customers worldwide.
  • 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. On March 12, the company announced that it was one of 11 companies selected to provide development, technical, and other services for Naval Information Warfare Center Pacific's Intelligence, Surveillance and Reconnaissance department. The combined value of the contract is up to $250 million.

Fastest Growing Industrial Stocks

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) 48.34 20.2 200.0 149.4
Equifax Inc. ( EFX) 174.41 21.2 771.4 23.5
Amerco Inc. ( UHAL) 587.73 11.5 490.5 26.1

Source: YCharts

  • Ingersoll Rand Inc.: Ingersoll Rand is an industrial machinery company that serves a broad range of industries. It makes products including vacuum equipment, power tools, lifting equipment, low-speed vehicles for consumers, fluid management equipment and aftermarket parts for areas such as the medical, laboratory, industrial manufacturing markets.
  • Equifax Inc.: Equifax Inc., one of the three major U.S. consumer consumer credit reporting agencies, is a data and analytics company. Equifax provides direct marketing and transaction processing services, with clients in financial services, retail, telecommunications, utilities, healthcare, and other sectors. Equifax announced on March 24 that it had closed the acquisition of i2verify, an income and employment verification provider. The acquisition expands Equifax's automated verification capabilities and strengthens its Workforce Solutions unit. The terms of the acquisition were not disclosed.
  • Amerco Inc.: AMERCO is a diversified holding company. It owns of U-Haul, which offers rental of trucks, trailers, and storage space. The company also offers property and casualty and life insurance, and related products through several subsidiaries.

Industrial Stocks with the Most Momentum

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 (%)
United Rentals Inc. ( URI) 305.41 22.1 252.6
Generac Holdings Inc. ( GNRC) 296.88 18.7 246.4
Carrier Global Corp. ( CARR) 40.14 34.9 246.2
Russell 1000 N/A N/A 66.1
Industrial Select Sector SPDR ETF (XLI) N/A N/A 75.9

Source: YCharts

  • United Rentals Inc.: United Rentals, through a subsidiary, provides equipment rental services. It serves industrial and commercial customers, the construction industry, individuals and homeowners.
  • Generac Holdings Inc.: Generac Holdings makes automatic, portable, and stationary standby generators for use in commercial, industrial, residential, and telecommunications applications. Generac has seen a sharp increase in generator sales as millions of people sheltering and working at home during the pandemic increasingly are demanding continuous power amid storms, hurricanes and other disruptions. The company reported 78.7% and 28.8% YOY increases to net income and net sales, respectively, in 2020.
  • Carrier Global Corp.: Carrier Global sells heating, air conditioning, and refrigeration products and related services. On March 16, the company reported that it would partner with HVAC distribution company Watsco Inc. (WSO), to form a joint venture to acquire Temperature Equipment Corporation. Temperature Equipment Corporation is the largest distributor of Carrier products in the Midwest. Under the agreement, Carrier will own 20% of the venture and Watsco 80%.

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