Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates), and the industry has underperformed the market over the past six months as its 2.6% return lagged the S&P 500 by 1.9 percentage points.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here are two resilient industrials stocks at the top of our wish list and one that may face trouble.
One IndustrialsStock to Sell:
Matson (MATX)
Market Cap: $3.66 billion
Founded by a Swedish orphan, Matson (NYSE: MATX) is a provider of ocean transportation and logistics services.
Why Is MATX Not Exciting?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.3% annually over the last two years
- Earnings per share have contracted by 11.6% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $111.98 per share, Matson trades at 11.2x forward P/E. Read our free research report to see why you should think twice about including MATX in your portfolio.
Two Industrials Stocks to Watch:
United Rentals (URI)
Market Cap: $48.92 billion
Owning the largest rental fleet in the world, United Rentals (NYSE: URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
Why Could URI Be a Winner?
- Market share has increased this cycle as its 12.1% annual revenue growth over the last two years was exceptional
- Highly efficient business model is illustrated by its impressive 25.6% operating margin, and its rise over the last five years was fueled by some leverage on its fixed costs
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 16.9% exceeded its revenue gains over the last five years
United Rentals’s stock price of $752.62 implies a valuation ratio of 16.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
SmartRent (SMRT)
Market Cap: $175.1 million
Founded by an employee at a real estate rental company, SmartRent (NYSE: SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.
Why Are We Positive On SMRT?
- Offerings are pivotal for their customers' operations as its ARR has averaged 28.5% growth over the past two years
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 43% annually
SmartRent is trading at $0.93 per share, or 1.2x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
