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 2.3% return lagged the S&P 500 by 10.6 percentage points.
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 resilient industrials stock at the top of our wish list and two that may face trouble.
Two Industrials Stocks to Sell:
Otis (OTIS)
Market Cap: $26.36 billion
Credited with inventing the first hydraulic passenger elevator, Otis Worldwide (NYSE: OTIS) is an elevator and escalator manufacturing, installation and service company.
Why Do We Steer Clear of OTIS?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Projected sales growth of 4.3% for the next 12 months suggests sluggish demand
- Earnings per share lagged its peers over the last two years as they only grew by 2.9% annually
Otis’s stock price of $69.44 implies a valuation ratio of 16.1x forward P/E. To fully understand why you should be careful with OTIS, check out our full research report (it’s free).
3M (MMM)
Market Cap: $83.88 billion
Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Is MMM Risky?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales growth of 4.9% for the next 12 months is soft and implies weaker demand
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
3M is trading at $162.66 per share, or 17.8x forward P/E. If you’re considering MMM for your portfolio, see our FREE research report to learn more.
One Industrials Stock to Watch:
MYR Group (MYRG)
Market Cap: $4.29 billion
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ: MYRG) is a specialty contractor in the electrical construction industry.
Why Are We Fans of MYRG?
- Exciting sales outlook for the upcoming 12 months calls for 19.4% growth, an acceleration from its two-year trend
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 90% exceeded its revenue gains over the last two years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its rising returns show it’s making even more lucrative bets
At $276.04 per share, MYR Group trades at 20.9x forward P/E. Is now a good 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
