Whether you see them or not, industrials businesses play a crucial part in our daily activities. But their prominence also brings high exposure to the ups and downs of economic cycles. Luckily, the tide is turning in their favor as the industry’s 21% return over the past six months has topped the S&P 500 by 12.5 percentage points.
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 resilient industrials stock at the top of our wish list and two we’re passing on.
Two Industrials Stocks to Sell:
Hertz (HTZ)
Market Cap: $1.54 billion
Started with a dozen Model T Fords, Hertz (NASDAQ: HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.
Why Should You Dump HTZ?
- Flat unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Eroding returns on capital suggest its historical profit centers are aging
- 9× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $4.94 per share, Hertz trades at 106.2x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including HTZ in your portfolio.
GE Vernova (GEV)
Market Cap: $198.8 billion
Born from the energy business of industrial giant General Electric in a 2023 spin-off, GE Vernova (NYSE: GEV) designs, manufactures, and services power generation equipment and grid technologies to help customers build more reliable and sustainable electric systems.
Why Does GEV Give Us Pause?
- Sizable revenue base leads to growth challenges as its 3.6% annual revenue increases over the last four years fell short of other industrials companies
- Gross margin of 16.2% reflects its high production costs
- Poor expense management has led to operating margin losses
GE Vernova is trading at $724.76 per share, or 53.2x forward P/E. Check out our free in-depth research report to learn more about why GEV doesn’t pass our bar.
One Industrials Stock to Buy:
Howmet (HWM)
Market Cap: $84.28 billion
Inventing the first forged aluminum truck wheel, Howmet (NYSE: HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.
Why Is HWM a Good Business?
- Annual revenue growth of 11.4% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin grew by 13.8 percentage points over the last five years, giving the company more chips to play with
Howmet’s stock price of $210.56 implies a valuation ratio of 49.6x 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
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 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 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.
