1 Industrials Stock on Our Buy List and 2 We Find Risky

Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 1.5% over the past six months. This drop is a stark contrast from the S&P 500’s 11.6% gain.

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 poised to generate sustainable market-beating returns and two we’re passing on.

Two Industrials Stocks to Sell:

Gibraltar (ROCK)

Market Cap: $1.36 billion

Gibraltar (NASDAQ:ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.

Why Are We Hesitant About ROCK?

1. Sales trends were unexciting over the last five years as its 3.8% annual growth was below the typical industrials company
2. Earnings per share have dipped by 9.3% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Gibraltar is trading at $45.83 per share, or 10.6x forward P/E. Dive into our free research report to see why there are better opportunities than ROCK.

Graphic Packaging Holding (GPK)

Market Cap: $3.35 billion

Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.

Why Are We Bearish on GPK?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 2.5% annually over the last two years
2. Estimated sales for the next 12 months are flat and imply a softer demand environment
3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

At $11.33 per share, Graphic Packaging Holding trades at 12.8x forward P/E. Check out our free in-depth research report to learn more about why GPK doesn’t pass our bar.

One Industrials Stock to Buy:

Howmet (HWM)

Market Cap: $106.7 billion

Inventing the first forged aluminum truck wheel, Howmet (NYSE:HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.

What Makes HWM Stand Out?

1. Annual revenue growth of 13.8% over the last five years was superb and indicates its market share increased during this cycle
2. Share repurchases over the last two years enabled its annual earnings per share growth of 42.8% to outpace its revenue gains
3. Free cash flow margin increased by 12.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Howmet’s stock price of $267.52 implies a valuation ratio of 46.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.