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 10%. This drop was worse than the S&P 500’s 1.7% loss.

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 best left ignored.

Two Industrials Stocks to Sell:

General Motors (GM)

Market Cap: $43.55 billion

Founded in 1908 by William C. Durant, General Motors (NYSE: GM) offers a range of vehicles and automobiles through brands such as Chevrolet, Buick, GMC, and Cadillac.

Why Is GM Not Exciting?

1. Weak unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Estimated sales decline of 6.7% for the next 12 months implies a challenging demand environment
3. Gross margin of 12.5% reflects its high production costs

General Motors is trading at $45.31 per share, or 4.2x forward P/E. If you’re considering GM for your portfolio, see our FREE research report to learn more.

Lockheed Martin (LMT)

Market Cap: $110.8 billion

Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.

Why Are We Out on LMT?

1. Annual sales growth of 3.3% over the last five years lagged behind its industrials peers as its large revenue base made it difficult to generate incremental demand
2. Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
3. Waning returns on capital imply its previous profit engines are losing steam

At $472.70 per share, Lockheed Martin trades at 16.8x forward P/E. Dive into our free research report to see why there are better opportunities than LMT.

One Industrials Stock to Watch:

Granite Construction (GVA)

Market Cap: $3.55 billion

Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE: GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.

Why Could GVA Be a Winner?

1. Annual revenue growth of 12.2% over the last two years was superb and indicates its market share increased during this cycle
2. Earnings per share grew by 48.5% annually over the last two years, massively outpacing its peers
3. Rising returns on capital show the company is starting to reap the benefits of its past investments

Granite Construction’s stock price of $81.70 implies a valuation ratio of 7.6x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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 Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.