Whether you see them or not, industrials businesses play a crucial part in our daily activities. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 10.7% over the past six months. This performance was worse than the S&P 500’s 1.9% loss.
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. On that note, here are two resilient industrials stocks at the top of our wish list and one best left ignored.
One Industrials Stock to Sell:
Albany (AIN)
Market Cap: $2.04 billion
Founded in 1895, Albany (NYSE: AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.
Why Should You Dump AIN?
- Sales trends were unexciting over the last five years as its 3% annual growth was below the typical industrials company
- Efficiency has decreased over the last five years as its operating margin fell by 9 percentage points
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 5.6% annually while its revenue grew
At $67.50 per share, Albany trades at 10.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than AIN.
Two Industrials Stocks to Watch:
Energy Recovery (ERII)
Market Cap: $688.3 million
Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ: ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors.
Why Do We Love ERII?
- Annual revenue growth of 15.1% over the last two years was superb and indicates its market share increased during this cycle
- Offerings are difficult to replicate at scale and result in a best-in-class gross margin of 69.4%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 71.9% exceeded its revenue gains over the last two years
Energy Recovery’s stock price of $12.63 implies a valuation ratio of 15.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Astronics (ATRO)
Market Cap: $1.12 billion
Integrating power outlets into many Boeing aircraft, Astronics (NASDAQ: ATRO) is a provider of technologies and services to the global aerospace, defense, and electronics industries.
Why Are We Positive On ATRO?
- Annual revenue growth of 19.1% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 81.3% annually, topping its revenue gains
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Astronics is trading at $31.90 per share, or 20.7x forward P/E. Is now the right time to buy? Find out in our full 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 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
