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The industrial sector includes companies that produce machinery, equipment, and supplies used in construction and manufacturing, as well as those that provide related services. These companies are closely tied to the economy, and their business volume often falls sharply during recessions, though each industrial subsector often performs differently.
Well-known industrial sector companies include Lockheed Martin Corp., Honeywell International Inc., and 3M Co. The industrial sector also includes companies that provide air transportation services, such as United Airlines Holdings Inc.
Industrial stocks, represented by an exchange-traded fund (ETF)—the Industrial Select Sector SPDR ETF (XLI)—have underperformed the broader market, providing investors with a total return of -11.9% compared with the Russell 1000’s total return of -9.4% over the past 12 months. These market performance numbers and all statistics in the tables below are as of June 24, 2022.
Here are the top three industrial stocks with the best value, the fastest growth, and the most momentum.
These are the industrial stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
| Best Value Industrial Stocks | |||
|---|---|---|---|
| Price ($) | Market Capitalization (Market Cap) ($B) | 12-Month Trailing P/E Ratio | |
| Louisiana-Pacific Corp. (LPX) | 52.57 | 4.3 | 3.1 |
| Builders FirstSource Inc. (BLDR) | 52.80 | 9.1 | 4.5 |
| Ryder System Inc. (R) | 71.14 | 3.6 | 5.8 |
Source: YCharts
- Louisiana-Pacific Corp.: Louisiana-Pacific makes building materials and engineered wood products. The company provides oriented strand board sheathing, siding and trim, I-joists, laminated veneer lumber, and similar products. Louisiana-Pacific announced on June 21 that Pacific Woodtech would acquire its Engineered Wood Products business, including facilities in North Carolina, California, and Canada. The $210-million transaction also includes timber license assets and Louisiana-Pacific’s SolidStart brand. It is expected to close in Q3 2022.
- Builders FirstSource Inc.: Builders FirstSource makes and distributes building products and provides integrated services to professional home builders. It manufactures roof and floor trusses, wall panels, stairs, and vinyl windows. It also manufactures precision framing and visualization tools for architectural design.
- Ryder System Inc.: Ryder System is a logistics and transportation company. It provides fleet, transportation, and supply chain services, which includes leasing and providing maintenance services for trucks, tractors, and trailers. The company announced in mid-June that it would open a new freight brokerage office in Nashville, Tennessee, a fast-growing logistics hub, followed by two additional locations in 2023. Ryder said its freight brokerage business saw gross revenues nearly triple in 2021 compared to a year earlier.
These are the top industrial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are factors that are critical to the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs), which may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
| Fastest Growing Industrial Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Carlisle Companies Inc. (CSL) | 240.14 | 12.4 | 277.3 | 59.0 |
| Core & Main Inc. (CNM) | 22.22 | 3.5 | 346.1 | 51.5 |
| Jacobs Engineering Group Inc. (J) | 125.42 | 16.1 | 750.0 | 8.1 |
Source: YCharts
- Carlisle Companies Inc.: Carlisle Companies is a global manufacturer of a broad range of engineered products for customers in commercial aerospace, defense electronics, medical devices, industrial, and buildings. It makes products for residential, commercial, and industrial buildings, including single-ply roofing, rigid foam insulation, architectural metal, heating, ventilation and air conditioning, and vapor barrier systems.
- Core & Main Inc.: Core & Main is a holding company that, through subsidiaries, provides water, drainage, fire protection, and wastewater products. The company serves private water company clients, professional contractors, and municipalities. On June 14 Core & Main reported earnings for Q1 FY 2022, ended May 1. Net income grew more than five-fold as net sales posted healthy gains YOY. The company cited numerous factors responsible for performance, including good demand across end markets, rising average selling prices, market share gains, and acquisitions.
- Jacobs Engineering Group Inc.: Jacobs Engineering Group provides services including engineering design, construction, construction management, maintenance, and consulting primarily for the government and private sectors. The company’s Q2 FY 2022 ended April 1. In its May 3 earnings report for that quarter, Jacobs announced a roughly eight-fold increase YOY in net earnings attributable to Jacobs. Growth was driven by accelerating demand in all of its key markets and strong bookings.
These are the industrial stocks that had the highest total return over the past 12 months.
| Industrial Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Quanta Services Inc. (PWR) | 125.98 | 18.1 | 37.2 |
| FTI Consulting Inc. (FCN) | 177.62 | 6.1 | 31.1 |
| Carlisle Companies Inc. (CSL) | 240.14 | 12.4 | 28.6 |
| Russell 1000 Index | N/A | N/A | -9.4 |
| Industrial Select Sector SPDR ETF (XLI) | N/A | N/A | -11.9 |
Source: YCharts
- Quanta Services Inc.: Quanta Services is a specialty contractor that focuses on construction, maintenance, and repair of electrical, underground utility, and communications infrastructure. This includes work on electrical substations, transmission lines, 5G, fiber optic lines, and oil and gas pipelines. On May 27, Quanta announced a quarterly cash dividend of $0.07 per share. The dividend is payable on July 15 to shareholders as of July 1, 2022.
- FTI Consulting Inc.: FTI Consulting is a business advisory firm. It provides advisory services across five key segments including corporate finance and restructuring; forensic and litigation consulting; economic consulting; technology; and strategic communications.
- Carlisle Companies Inc.: See above for company description.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
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