2 Industrials Stocks with Exciting Potential and 1 We Turn Down

Barchart·05/25/2026 03:18:23

Whether you see them or not, industrials businesses play a crucial part in our daily activities. They are also bound to benefit from a friendlier regulatory environment with the Trump administration, and this excitement has led to a six-month gain of 18% for the sector - higher than the S&P 500’s 10% return.

Although these companies have produced results lately, a cautious approach is imperative. When the cycle naturally turns, the losers can be left for dead while the winners consolidate and take more of the market. Keeping that in mind, here are two industrials stocks boasting durable advantages and one we’re steering clear of.

One Industrials Stock to Sell:

Carrier Global (CARR)

Market Cap: $52.44 billion

Founded by the inventor of air conditioning, Carrier Global (NYSE:CARR) manufactures heating, ventilation, air conditioning, and refrigeration products.

Why Should You Dump CARR?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Earnings per share fell by 6% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
3. Waning returns on capital imply its previous profit engines are losing steam

At $62.96 per share, Carrier Global trades at 22.2x forward P/E. If you’re considering CARR for your portfolio, see our FREE research report to learn more.

Two Industrials Stocks to Watch:

AMETEK (AME)

Market Cap: $51.46 billion

Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.

Why Could AME Be a Winner?

1. Impressive 10.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Highly efficient business model is illustrated by its impressive 25.3% operating margin, and it turbocharged its profits by achieving some fixed cost leverage
3. Strong free cash flow margin of 21.6% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy

AMETEK is trading at $224.58 per share, or 26.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Bel Fuse (BELFA)

Market Cap: $3.80 billion

Founded by 26-year-old Elliot Bernstein during the electronics boom after WW2, Bel Fuse (NASDAQ:BELF.A) provides electronic systems and devices to the telecommunications, networking, transportation, and industrial sectors.

Why Is BELFA a Good Business?

1. Operating margin improvement of 9.4 percentage points over the last five years demonstrates its ability to scale efficiently
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 20.5% annually, topping its revenue gains
3. Free cash flow margin jumped by 13.3 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Bel Fuse’s stock price of $251.72 implies a valuation ratio of 18x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.

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