1 Industrials Stock with Exciting Potential and 2 We Turn Down

Even if they go mostly unnoticed, industrial businesses are the backbone of our country. 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 9.8% for the sector - higher than the S&P 500’s 4.8% return.

Although these companies have produced results lately, a cautious approach is imperative. When the cycle naturally turns, the losers can be left for dead while the winners consolidate and take more of the market. Taking that into account, here is one industrials stock poised to generate sustainable market-beating returns and two we’re passing on.

Two Industrials Stocks to Sell:

Vontier (VNT)

Market Cap: $5.43 billion

A spin-off of a spin-off, Vontier (NYSE:VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.

Why Are We Out on VNT?

1. 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
2. Projected sales growth of 1.6% for the next 12 months suggests sluggish demand
3. Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable

Vontier is trading at $38.34 per share, or 11.5x forward P/E. Check out our free in-depth research report to learn more about why VNT doesn’t pass our bar.

Taylor Morrison Home (TMHC)

Market Cap: $5.9 billion

Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE:TMHC) builds single family homes and communities across the United States.

Why Is TMHC Not Exciting?

1. Demand cratered as it couldn’t win new orders over the past two years, leading to an average 33.6% decline in its backlog
2. Forecasted revenue decline of 17.2% for the upcoming 12 months implies demand will fall off a cliff
3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 3.8% annually

Taylor Morrison Home’s stock price of $61.27 implies a valuation ratio of 11.9x forward P/E. Read our free research report to see why you should think twice about including TMHC in your portfolio.

One Industrials Stock to Buy:

HEICO (HEI)

Market Cap: $36.4 billion

Founded in 1957, HEICO (NYSE:HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.

Why Do We Love HEI?

1. Annual revenue growth of 19.5% over the past two years was outstanding, reflecting market share gains this cycle
2. Earnings per share grew by 28.6% annually over the last two years and trumped its peers
3. Strong free cash flow margin of 17.3% enables it to reinvest or return capital consistently

At $304.50 per share, HEICO trades at 53x forward P/E. Is now the right time to buy? Find out in our full 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 meeting near-term momentum — both boxes checked at the same time.

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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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.