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 confused about where we could go next. This uncertainty has led to a flat return for the industry over the past six months while the S&P 500 was up 4.1%.
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 passing on.
One IndustrialsStock to Sell:
JELD-WEN (JELD)
Market Cap: $361.7 million
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE: JELD) manufactures doors, windows, and other related building products.
Why Should You Sell JELD?
- 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
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10.7 percentage points
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
JELD-WEN is trading at $4.35 per share, or 7x forward P/E. Read our free research report to see why you should think twice about including JELD in your portfolio.
Two Industrials Stocks to Watch:
Lennox (LII)
Market Cap: $21.71 billion
Based in Texas and founded over a century ago, Lennox (NYSE: LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.
Why Are We Fans of LII?
- Operating margin expanded by 4.6 percentage points over the last five years as it scaled and became more efficient
- Earnings per share grew by 24.3% annually over the last two years and trumped its peers
- ROIC punches in at 50.4%, illustrating management’s expertise in identifying profitable investments
At $611.85 per share, Lennox trades at 25.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Itron (ITRI)
Market Cap: $6.23 billion
Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.
Why Are We Positive On ITRI?
- Operating margin improved by 11.6 percentage points over the last five years as it eliminated redundant costs
- Additional sales over the last two years increased its profitability as the 98.7% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 5.3 percentage points over the last five years, giving the company more chips to play with
Itron’s stock price of $136.61 implies a valuation ratio of 24.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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