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1 Industrials Stock with Solid Fundamentals and 2 We Find Risky
Even if they go mostly unnoticed, industrial businesses are the backbone of our country. But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates), and the market seems convinced that demand will slow. Due to this bearish outlook, the industry has tumbled by 7% over the past six months. This performance is a noticeable divergence from the S&P 500’s 9.7% return.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here is one industrials stock boasting a durable advantage and two we’re passing on.
Two Industrials Stocks to Sell:
Tennant (TNC)
Market Cap: $1.13 billion
As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE:TNC) designs, manufactures, and sells cleaning products to various sectors.
Why Should You Sell TNC?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.7% annually over the last two years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
At $66.00 per share, Tennant trades at 13.3x forward P/E. Dive into our free research report to see why there are better opportunities than TNC.
L.B. Foster (FSTR)
Market Cap: $360.8 million
Founded with a $2,500 loan, L.B. Foster (NASDAQ:FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.
Why Does FSTR Give Us Pause?
- Sales pipeline suggests its future revenue growth likely won’t meet our standards as its backlog hasn’t budged over the past two years
- Earnings per share lagged its peers over the last five years as they only grew by 1.2% annually
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
L.B. Foster is trading at $34.34 per share, or 19.2x forward P/E. To fully understand why you should be careful with FSTR, check out our full research report (it’s free).
One Industrials Stock to Watch:
United Rentals (URI)
Market Cap: $65.2 billion
Owning the largest rental fleet in the world, United Rentals (NYSE:URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
Why Does URI Stand Out?
- Impressive 13.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Healthy operating margin of 26.1% shows it’s a well-run company with efficient processes
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
United Rentals’s stock price of $1,044 implies a valuation ratio of 19.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.