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. The market seems to be debating where we are in the cycle as industrials stocks were flat over the past six months. At the same time, the S&P 500 rose by 12.9%.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Taking that into account, here is one resilient industrials stock at the top of our wish list and two we’re passing on.
Two Industrials Stocks to Sell:
Whirlpool (WHR)
Market Cap: $2.56 billion
Credited with introducing the first automatic washing machine, Whirlpool (NYSE: WHR) is a manufacturer of a variety of home appliances.
Why Is WHR Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.3% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- 9× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Whirlpool is trading at $39.30 per share, or 11.5x forward P/E. Dive into our free research report to see why there are better opportunities than WHR.
Martin Marietta Materials (MLM)
Market Cap: $31.4 billion
Operating one of North America's largest networks of quarries, including 14 underground mines, Martin Marietta Materials (NYSE: MLM) is a natural resource-based building materials company that supplies aggregates, cement, and other construction materials for infrastructure and building projects.
Why Are We Wary of MLM?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Flat earnings per share over the last two years lagged its peers
- Underwhelming 8.1% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $533 per share, Martin Marietta Materials trades at 27.4x forward P/E. If you’re considering MLM for your portfolio, see our FREE research report to learn more.
One Industrials Stock to Buy:
Armstrong World (AWI)
Market Cap: $7.49 billion
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.
Why Do We Love AWI?
- Market share has increased this cycle as its 12% annual revenue growth over the last two years was exceptional
- Highly efficient business model is illustrated by its impressive 25% operating margin, and its profits increased over the last five years as it scaled
- Free cash flow margin increased by 6.8 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Armstrong World’s stock price of $177.19 implies a valuation ratio of 19.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
