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 3.3% has trailed the S&P 500’s 16.4% gain.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here are two industrials stocks boasting durable advantages and one we’re steering clear of.
One Industrials Stock to Sell:
Sunrun (RUN)
Market Cap: $2.05 billion
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ:RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Why Are We Hesitant About RUN?
- Poor expense management has led to operating margin losses
- Cash-burning history makes us doubt the long-term viability of its business model
Sunrun’s stock price of $8.54 implies a valuation ratio of 8.3x forward P/E. If you’re considering RUN for your portfolio, see our FREE research report to learn more.
Two Industrials Stocks to Watch:
Powell (POWL)
Market Cap: $6.70 billion
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE:POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Why Is POWL a Good Business?
- Annual revenue growth of 20.5% over the last five years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 22.2% outpaced its revenue gains
- Free cash flow margin grew by 25.2 percentage points over the last five years, giving the company more chips to play with
At $184.35 per share, Powell trades at 27.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Leidos (LDOS)
Market Cap: $16.02 billion
Formed through the split of IT services company SAIC, Leidos (NYSE:LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.
Why Are We Positive on LDOS?
- Sales pipeline is in good shape as its backlog averaged 15.9% growth over the past two years
- Share repurchases over the last two years enabled its annual earnings per share growth of 16.8% to outpace its revenue gains
- Free cash flow margin expanded by 6.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Leidos is trading at $129.41 per share, or 10.9x 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 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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.