The industrial sector includes companies that produce machinery, equipment, and supplies that are used in construction and manufacturing, as well as providing related services. These companies are closely tied to the economy, and their business volume often shrinks during recessions, though each industrial subsector often performs differently. Well-known companies in this group include Caterpillar Inc. (CAT), Union Pacific Corp. (UNP), and 3M Co. (MMM). The industrial sector also includes companies that provide air transportation services such as American Airlines Group Inc. (AAL). Industrial stocks, as represented by the Industrial Select Sector SPDR ETF (XLI), have underperformed the broader market with a total return of -11.1% compared to the S&P 500’s total return of 5.5% over the past 12 months. These market performance numbers and the statistics in the tables below are as of June 24.
Here are the top 3 industrial stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Industrial Stocks
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|
|Delta Air Lines Inc. (DAL)||29.64||18.9||5.5|
|Johnson Controls International PLC (JCI)||34.79||25.9||5.8|
|Alaska Air Group Inc. (ALK)||36.83||4.5||8.6|
- Delta Air Lines Inc.: Delta Air Lines offers air transportation and related services for customers, freight, and mail. The company reported a net loss of $534 million on an 18% decline in revenue for Q1 2020, which ended March 31, 2020. CEO Ed Bastian said that, due to the coronavirus pandemic, the company expects Q2 revenue to decline by 90% compared to the same three-month period in 2019.
- Johnson Controls International PLC: Johnson Controls provides building products and technology solutions, including air systems, building management, HVAC controls, security, and fire safety solutions. The company posted a 58% drop in net income on a 6% decline in net sales in Q2 2020 ended March 31, 2020. Johnson Controls said it is withdrawing its previously issued guidance for the 2020 fiscal year due to the uncertain macro environment amid the COVID-19 pandemic.
- Alaska Air Group Inc.: Alaska Air operates and manages more than 1,200 daily flights to 115 destinations in the United States, Mexico, Canada, and Costa Rica.
Fastest Growing Industrial Stocks
These are the industrial stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Industrial Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Masco Corp. (MAS)||49.10||13.0||392.3|
|General Electric Co. (GE)||7.00||61.2||75.0|
|Dover Corp. (DOV)||94.80||13.7||68.1|
- Masco Corp.: Masco manufactures home improvement and building products, including faucets, kitchen and bath cabinets, architectural coatings, and hardware. The company sells its products through mass merchandisers, home centers, hardware stores, and other wholesale and retail outlets. Masco reported net income growth of 323.6% on net sales growth of 4.5% in Q1 2020 ended March 31, 2020.
- General Electric Co.: General Electric sells a diverse range of technology and financial products and services. It offers aircraft engines, power generation, water processing, household appliances, industrial products, and business and consumer financing. The company recently announced the appointment of John Slattery to the role of president and chief executive officer (CEO) of GE Aviation, effective July 13. Slattery will replace David Joyce, who is retiring after 40 years with the company.
- Dover Corp.: Dover manufactures industrial products and equipment. The company’s products include printing, identification, marking and coding systems, waste handling, refrigeration systems, display cases, industrial pumps, fuel dispensers, and more.
Industrial Stocks with the Most Momentum
These are the industrial stocks that had the highest total return over the last 12 months.
|Industrial Stocks with the Most Momentum|
|Market Cap ($…)||12-Month Trailing Total Return (%)|
|Old Dominion Freight Lines Inc. (ODFL)||164.97||19.5||70.2|
|J.B. Hunt Transport Services Inc. (JBHT)||119.85||12.6||35.8|
|Fastenal Co. (FAST)||42.22||24.2||33.0|
|Industrial Select Sector SPDR ETF (XLI)||N/A||N/A||-11.1|
- Old Dominion Freight Lines Inc.: Old Dominion Freight Lines is a motor carrier that transports shipments of a variety of goods and commodities. The company serves regional markets across the U.S.
- J.B. Hunt Transport Services Inc.: J.B. Hunt is a transportation services company that offers logistics management, trucking, warehousing, freight forwarding, cargo, storage, shipping, supply chain management, and distribution services.
- Fastenal Co.: Fastenal provides industrial and construction supplies via both wholesale and retail channels, and serves customers worldwide. The company reported net earnings growth of 4.4% on net sales growth of 4.4% for Q1 2020 ended March 31, 2020.
YCharts. “Financial Data,” Accessed Jun. 24, 2020.
Delta Air Lines Inc. “Delta Air Lines Announces March Quarter 2020 Financial Results and COVID-19 Response Actions,” Accessed Jun. 24, 2020.
Johnson Controls PLC. “JOHNSON CONTROLS REPORTS FISCAL Q2 RESULTS AND PROVIDES UPDATES RELATED TO THE IMPACT OF COVID-19,” Accessed Jun. 24, 2020.
Masco Corp. “Masco Corporation Reports First Quarter 2020 Results,” Accessed Jun. 24, 2020.
General Electric Co. “David Joyce to Retire from GE; John Slattery to Become President and CEO of GE Aviation,” Accessed Jun. 24, 2020.
Fastenal Co. “Fastenal Company Reports 2020 First Quarter Earnings,” Accessed Jun. 24, 2020.