Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. 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 4.5% has trailed the S&P 500’s 14% gain.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Taking that into account, here is one industrials stock boasting a durable advantage and two we would avoid.
Two Industrials Stocks to Sell:
Fortive (FTV)
Market Cap: $16.63 billion
Taking its name from the Latin root of "strong", Fortive (NYSE: FTV) manufactures products and develops industrial software for numerous industries.
Why Do We Pass on FTV?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.1% annually over the last five years
- Earnings per share have dipped by 8.3% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Fortive’s stock price of $55.05 implies a valuation ratio of 17.7x forward P/E. Dive into our free research report to see why there are better opportunities than FTV.
Silgan Holdings (SLGN)
Market Cap: $4.02 billion
Established in 1987, Silgan Holdings (NYSE: SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Why Is SLGN Risky?
- Annual revenue growth of 4.7% over the last five years was below our standards for the industrials sector
- Gross margin of 16.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 2.4% annually
Silgan Holdings is trading at $38.00 per share, or 9.9x forward P/E. Read our free research report to see why you should think twice about including SLGN in your portfolio.
One Industrials Stock to Buy:
Axon (AXON)
Market Cap: $36.84 billion
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Is AXON a Good Business?
- ARR growth averaged 36.9% over the past two years, showing customers are willing to take multi-year bets on its offerings
- Expected revenue growth of 32.4% for the next year suggests its market share will rise
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 23.2% annually
At $452.78 per share, Axon trades at 52.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
