Whether you see them or not, industrials businesses play a crucial part in our daily activities. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and investors seem to be forecasting a downturn - over the past six months, the industry has pulled back by 1.7%. This drawdown was disheartening since the S&P 500 gained 5.1%.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here are two industrials stocks we think can generate sustainable market-beating returns and one we’re swiping left on.

One Industrials Stock to Sell:

Genco (GNK)

Market Cap: $614 million

Headquartered in NYC, Genco (NYSE:GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.

Why Is GNK Not Exciting?

1. Demand for its offerings was relatively low as its number of owned vessels has underwhelmed
2. Sales are projected to tank by 18.1% over the next 12 months as its demand continues evaporating
3. Issuance of new shares over the last two years caused its earnings per share to fall by 34.7% annually, even worse than its revenue declines

Genco’s stock price of $14.43 implies a valuation ratio of 20x forward price-to-earnings. Read our free research report to see why you should think twice about including GNK in your portfolio, it’s free.

Two Industrials Stocks to Watch:

AZZ (AZZ)

Market Cap: $2.84 billion

Responsible for projects like nuclear facilities, AZZ (NYSE:AZZ) is a provider of metal coating and power infrastructure solutions.

Why Does AZZ Stand Out?

1. Market share has increased this cycle as its 19.4% annual revenue growth over the last two years was exceptional
2. Operating margin improvement of 5.9 percentage points over the last five years demonstrates its ability to scale efficiently
3. Earnings per share have comfortably outperformed the peer group average over the last two years, increasing by 14.3% annually

AZZ is trading at $95.79 per share, or 17.2x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.

CACI (CACI)

Market Cap: $7.52 billion

Founded to commercialize SIMSCRIPT, CACI International (NYSE:CACI) offers defense, intelligence, and IT solutions to support national security and government transformation efforts.

Why Are We Positive On CACI?

1. Sales pipeline is in good shape as its backlog averaged 12.8% growth over the past two years
2. Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
3. Share repurchases over the last two years enabled its annual earnings per share growth of 16.6% to outpace its revenue gains

At $337.95 per share, CACI trades at 13.1x forward price-to-earnings. Is now the right time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.

Get started by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.