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 industry’s six-month return of 2.3% has fallen short of the S&P 500’s 11.7% rise.
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. With that said, here are two industrials stocks we think can generate sustainable market-beating returns and one that may face trouble.
One Industrials Stock to Sell:
Luxfer (LXFR)
Market Cap: $457.3 million
With its magnesium alloys used in the construction of the famous Spirit of St. Louis aircraft, Luxfer (NYSE: LXFR) offers specialized materials, components, and gas containment devices to various industries.
Why Does LXFR Worry Us?
- Sales tumbled by 2.3% annually over the last two years, showing market trends are working against it during this cycle
- Estimated sales growth of 2.7% for the next 12 months is soft and implies weaker demand
- Earnings per share have dipped by 2.1% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Luxfer is trading at $17.10 per share, or 13.1x forward P/E. Check out our free in-depth research report to learn more about why LXFR doesn’t pass our bar.
Two Industrials Stocks to Watch:
Advanced Energy (AEIS)
Market Cap: $13.19 billion
Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ: AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.
Why Does AEIS Stand Out?
- Impressive 16.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Projected revenue growth of 36.6% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Earnings per share have massively outperformed its peers over the last two years, increasing by 46.8% annually
At $332.23 per share, Advanced Energy trades at 25.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Crane (CR)
Market Cap: $12.89 billion
Based in Connecticut, Crane (NYSE: CR) is a diversified manufacturer of engineered industrial products, including fluid handling, and aerospace technologies.
Why Does CR Catch Our Eye?
- Operating margin expansion of 5.3 percentage points over the last five years shows the company optimized its expenses
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 21.9% outpaced its revenue gains
- Free cash flow margin jumped by 5.4 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Crane’s stock price of $223.24 implies a valuation ratio of 30.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
