The industrial sector includes companies that produce machinery, equipment, and supplies 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 industrial sector 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 an exchange-traded fund (ETF)—the Industrial Select Sector SPDR ETF (XLI)—have underperformed the broader market, providing investors with a total return of 19.7% compared to the Russell 1000’s total return of 27.2% over the past 12 months. These market performance numbers and all statistics in the tables below are as of Dec. 23, 2021.
Here are the top three 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 that you’re paying less for each dollar of profit generated.
|Best Value Industrial Stocks|
|Price ($)||Market Capitalization (Market Cap) ($B)||12-Month Trailing P/E Ratio|
|Louisiana-Pacific Corp. (LPX)||76.39||6.7||5.4|
|Seaboard Corp. (SEB)||3930.99||4.6||6.4|
|Owens Corning Inc. (OC)||88.83||8.9||9.4|
- Louisiana-Pacific Corp.: Louisiana-Pacific makes building materials and engineered wood products. The company provides oriented strand board sheathing, siding and trim, I-joists, laminated veneer lumber, and similar products. It has manufacturing and administrative locations in the United States, Canada, and South America. On Dec. 20, 2021, Louisiana-Pacific announced plans to build a new facility on 75 acres on a site in New York state that will focus on the company’s prefinished siding product, ExpertFinish, a rapidly growing product category. The company did not release the dollar value of the investment.
- Seaboard Corp.: Seaboard is an international agribusiness and transportation company that mostly produces and processes domestic pork and ships cargo. The company also engages in the production of sugar and alcohol, commodity trading, grain processing, and generation of electric power overseas. On Nov. 2, 2021, Seaboard announced a quarterly cash dividend of $2.25 per share of its common stock. The dividend was payable on Nov. 22, 2021, to stockholders of record as of Nov. 12, 2021.
- Owens Corning Inc.: Owens Corning provides building materials, including engineered materials, roofing, insulation and fiberglass composite products. The company’s products have residential, commercial, and industrial applications. During the third quarter (Q3) of 2021, ended Sept. 30, 2021, Owens Corning reported 25.7% growth in net earnings as net sales rose 16.2% year over year (YOY). The increases were driven by strong sales growth across the company’s composites, roofing, and insulation segments.
These are the top industrial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are factors that are critical to the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs), which may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest-Growing Industrial Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Builders FirstSource Inc. (BLDR)||82.15||15.7||308.2||140.0|
|ManpowerGroup Inc. (MAN)||95.48||5.2||883.3||12.1|
|Expeditors International of Washington Inc. (EXPD)||130.76||22.2||86.6||83.9|
- Builders FirstSource Inc.: Builders FirstSource makes and distributes building products and provides integrated services to professional homebuilders. It’s one of the largest suppliers in the building industry. In 2021, Builders FirstSource completed an all-stock merger with BMC Stock Holdings Inc.
- ManpowerGroup Inc.: ManpowerGroup provides workforce solutions and staffing services in the Americas, Europe, Asia, and the Middle East. Its services include customized workforce strategies and management of financial and administrative processes. The company paid its semi-annual dividend of $1.26 per share on Dec. 15, 2021, to shareholders of record as of Dec. 1, 2021.
- Expeditors International of Washington Inc.: Expeditors International of Washington is a global logistics company. The company provides air and ocean freight consolidation and forwarding, warehousing and distribution, customs brokerage, vendor consolidation, cargo insurance, and similar services. For Q3 2021, ended Sept. 30, 2021, Expeditors International of Washington reported 87.7% YOY growth in net earnings on 83.9% YOY improvement in total revenues. The company cited high demand and major disruptions in global supply chains, including congestion at ocean ports, as factors driving the company’s performance.
These are the industrial stocks that had the highest total return over the past 12 months.
|Industrial Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Louisiana-Pacific Corp. (LPX)||76.39||6.7||102.0|
|Builders FirstSource Inc. (BLDR)||82.15||15.7||97.7|
|Robert Half International Inc. (RHI)||109.21||12.2||78.2|
|Russell 1000 Index||N/A||N/A||27.2|
|Industrial Select Sector SPDR ETF (XLI)||N/A||N/A||19.7|
- Louisiana-Pacific Corp.: See company description above.
- Builders FirstSource Inc.: See company description above.
- Robert Half International Inc.: Robert Half International provides temporary and full-time staffing services for areas such as information technology, finance, accounting, risk consulting, and legal support. For Q3 2021, ended Sept. 30, 2021, the company reported net income of $171 million, or $1.53 per share, on revenues of $1.713 billion vs. net income of $76 million, or $0.67 per share, on revenues of $1.190 billion for Q3 2020.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. “Financial Data.” Accessed Jan. 1, 2022.
Louisiana-Pacific, Investor Relations. “LP Building Solutions Announces Plans for a New LP® SmartSide® ExpertFinish® Facility in the Town of Bath, New York.” Accessed Jan. 1, 2022.
Seaboard. “Earnings Report 3rd Quarter 2021.” Accessed Jan. 1, 2022.
Owens Corning, Investor Relations. “Owens Corning Reports Third-Quarter 2021 Results.” Accessed Jan. 1, 2022.
Builders FirstSource, Investor Relations. “Builders FirstSource Completes Combination with BMC Stock Holdings.” Accessed Jan. 1, 2022.
ManpowerGroup, Investor Relations. “ManpowerGroup Declares $1.26 Dividend.” Accessed Jan. 1, 2022.
Expeditors International of Washington, Investor Relations. “Expeditors Reports Third Quarter 2021 EPS of $2.09.” Accessed Jan. 1, 2022.
Robert Half International, Investor Center. “Robert Half Reports Third-Quarter Financial Results.” Accessed Jan. 1, 2022.