Whether you see them or not, industrials businesses play a crucial part in our daily activities. They are also bound to benefit from a friendlier regulatory environment with the Trump administration, and this excitement has led to a six-month gain of 20.4% for the sector - higher than the S&P 500’s 6.5% return.
Nevertheless, investors must be mindful as the cycle can unexpectedly turn. When this inevitably happens, only the elite companies will survive and ultimately thrive. Keeping that in mind, here is one industrials stock poised to generate sustainable market-beating returns and two that may face trouble.
Two Industrials Stocks to Sell:
W.W. Grainger (GWW)
Market Cap: $53.39 billion
Founded as a supplier of motors, W.W. Grainger (NYSE: GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.
Why Are We Hesitant About GWW?
- 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
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.6%
- Earnings per share have dipped by 1.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
At $1,127 per share, W.W. Grainger trades at 25.9x forward P/E. Check out our free in-depth research report to learn more about why GWW doesn’t pass our bar.
Helios (HLIO)
Market Cap: $2.46 billion
Founded on the principle of treating others as one wants to be treated, Helios (NYSE: HLIO) designs, manufactures, and sells motion and electronic control components for various sectors.
Why Should You Dump HLIO?
- 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
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Helios is trading at $74.20 per share, or 26x forward P/E. If you’re considering HLIO for your portfolio, see our FREE research report to learn more.
One Industrials Stock to Watch:
Republic Services (RSG)
Market Cap: $67.78 billion
Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.
Why Do We Like RSG?
- Annual revenue growth of 10.3% over the last five years beat the sector average and underscores the unique value of its offerings
- Healthy operating margin of 19% shows it’s a well-run company with efficient processes, and it turbocharged its profits by achieving some fixed cost leverage
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
Republic Services’s stock price of $219.39 implies a valuation ratio of 30.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
