1 Industrials Stock with Solid Fundamentals and 2 We Brush Off

Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 17.8% gain over the past six months, beating the S&P 500 by 8.3 percentage points.

Regardless of these results, investors should tread carefully. The diversity of companies in this space means that not all are created equal or well-positioned for the inescapable downturn. Keeping that in mind, here is one industrials stock boasting a durable advantage and two that may face trouble.

Two Industrials Stocks to Sell:

Generac (GNRC)

Market Cap: $10.22 billion

With its name deriving from a combination of “generating” and “AC”, Generac (NYSE:GNRC) offers generators and other power products for residential, industrial, and commercial use.

Why Are We Hesitant About GNRC?

1. Sales trends were unexciting over the last two years as its 4.2% annual growth was below the typical industrials company
2. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 9.5 percentage points
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $174.25 per share, Generac trades at 23.3x forward P/E. To fully understand why you should be careful with GNRC, check out our full research report (it’s free).

Vulcan Materials (VMC)

Market Cap: $39.6 billion

Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.

Why Is VMC Not Exciting?

1. Sluggish trends in its tons shipped suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.3%
3. High input costs result in an inferior gross margin of 25.2% that must be offset through higher volumes

Vulcan Materials’s stock price of $294.50 implies a valuation ratio of 31.8x forward P/E. Read our free research report to see why you should think twice about including VMC in your portfolio.

One Industrials Stock to Watch:

Gorman-Rupp (GRC)

Market Cap: $1.39 billion

Powering fluid dynamics since 1934, Gorman-Rupp (NYSE:GRC) has evolved from its Ohio origins into a global manufacturer and seller of pumps and pump systems.

Why Could GRC Be a Winner?

1. Impressive 13.5% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Demand is greater than supply as the company’s 12.7% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 33% annually

Gorman-Rupp is trading at $52.77 per share, or 23.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.