The industrial sector includes companies that produce machinery, equipment, and supplies that are used in construction and manufacturing, as well as those that provide related services. These companies are closely tied to the economy, and their business volume often falls sharply during recessions, though each industrial subsector often performs differently. Well-known companies include Lockheed Martin Corp. (LMT), Honeywell International Inc. (HON), and 3M Co. (MMM). The industrial sector also includes companies that provide air transportation services such as United Airlines Holdings Inc. (UAL).
Industrial stocks, represented by the Industrial Select Sector SPDR ETF (XLI), have underperformed the broader market, providing investors with a total return of 20.0% compared to the Russell 1000's total return of 30.4% over the past 12 months. These market performance numbers and all statistics in the tables below are as of Nov. 24, 2021.
Here are the top three industrial stocks with the best value, the fastest growth, and the most momentum.
These are the industrial stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Industrial Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Louisiana-Pacific Corp. (LPX)||70.72||6.2||5.0|
|Seaboard Corp. (SEB)||3989.97||4.6||6.5|
|Owens-Corning Inc. (OC)||91.65||9.2||9.7|
- Louisiana-Pacific Corp.: Louisiana-Pacific makes building materials and engineered wood products. The company provides oriented strand board sheathing, siding and trim, I-joists, laminated veneer lumber, and similar products. It has manufacturing and administrative locations in the U.S., Canada, and South America. In Q3 2021 ended Sept. 30, net income attributable to LP more than doubled 53.3% improvement in net sales year-over-year (YOY). The growth was largely driven by strength in business lines such as siding solutions and oriented strand boards.
- Seaboard Corp.: Seaboard is an international agribusiness and transportation company that mostly produces and processes domestic pork and ships cargo. The company also engages in the production of sugar and alcohol, commodity trading, grain processing, and generation of electric power overseas. For Q3 2021 ended Nov. 2, the company reported a 39.0% YOY decline in net earnings attributable to Seaboard, as well as a 38.4% YOY improvement in net sales.
- Owens-Corning Inc.: Owens-Corning provides building materials including engineered materials, roofing, insulation and fiberglass composite products. The company's products have residential, commercial, and industrial applications.
These are the top industrial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are factors that are critical to the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs), which may make one figure or another unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest-Growing Industrial Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Builders FirstSource Inc. (BLDR)||73.35||14.1||308.2||140.0|
|Nielsen Holdings PLC (NLSN)||21.40||7.7||1,300||5.5|
|ManpowerGroup Inc. (MAN)||98.78||5.4||883.3||12.1|
- Builders FirstSource Inc.: Builders FirstSource makes and distributes building products and provides integrated services to professional homebuilders. It's one of the largest suppliers in the building industry. The company saw net income surge by nearly five-fold YOY and sales more than doubled in Q3 2021 ended Sept. 30, as results were bolstered by its merger with BMC. These figures also benefited from commodity inflation, and strong organic growth.
- Nielsen Holdings PLC: Nielsen Holdings is a global data and analytics company focused on the media industry. It offers audience measurement and various analytics services. Its services are used by media publishers, marketers, and businesses in the consumer-packaged goods industry. On Nov. 22, the company announced that it will enhance its national television measurement system by measuring viewing in a more precise manner. The new approach will allow for audience estimates based on individual ads rather than on commercial minutes, providing advertisers with the ability to directly compare, plan and optimize ad campaign performance.
- ManpowerGroup Inc.: ManpowerGroup provides workforce solutions and staffing services in the Americas, Europe, Asia, and the Middle East. It offers services including management of financial and administrative processes and customized workforce strategies.
These are the industrial stocks that had the highest total return over the past 12 months.
|Industrial Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Louisiana-Pacific Corp. (LPX)||70.72||6.2||102.8|
|Builders FirstSource Inc. (BLDR)||73.35||14.1||99.4|
|Generac Holdings Inc. (GNRC)||432.83||27.3||97.1|
|Russell 1000 Index||N/A||N/A||30.4|
|Industrial Select Sector SPDR ETF (XLI)||N/A||N/A||20.0|
- Louisiana-Pacific Corp.: See company description above.
- Builders FirstSource Inc.: See company description above.
- Generac Holdings Inc.: Generac designs and manufactures power generation equipment and other engine-powered products, including generators for commercial, residential, mobile, and industrial use. On Nov. 1, Generac announced it would acquire Canada-based ecobee Inc., a leader in sustainable smart home solutions, in a transaction valued up to $770 million contingent on the achievement of certain performance targets. The acquisition is expected to enhance Generac's residential energy technology offerings.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "Financial Data." Accessed Nov. 26, 2021.
Louisiana-Pacific Corp. "LP Building Solutions Reports Third Quarter 2021 Results, Provides Capital Allocation Update and Fourth Quarter Outlook, and Announces an Additional $500 Million Share Repurchase Authorization." Accessed Nov. 26, 2021.
Seaboard Corp. "EARNINGS REPORT 3RD QUARTER 2021." Accessed Nov. 26, 2021.
Builders FirstSource Inc. "Builders FirstSource Reports Record Third Quarter 2021 Results." Accessed Nov. 26, 2021.
Nielsen Holdings PLC. "Nielsen Transforms Linear TV Measurement With New Individual Commercial Metrics In Lead Up To Nielsen One." Accessed Nov. 26, 2021.
Generac Holdings Inc. "Generac to Acquire ecobee Inc." Accessed Nov. 26, 2021.