Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and the industry is currently lagging as its six-month return of 5.7% has trailed the S&P 500’s 9% gain.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. With that said, here are two industrials stocks boasting durable advantages and one we’re swiping left on.
Market Cap: $1.15 billion
Standing out with its digital keyless entry into self-storage room technology, Janus (NYSE:JBI) is a provider of easily accessible self-storage solutions.
Why Are We Cautious About JBI?
Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
Forecasted revenue decline of 18% for the upcoming 12 months implies demand will fall off a cliff
Earnings per share fell by 4.4% annually over the last four years while its revenue grew, partly because it diluted shareholders
Janus is trading at $8.37 per share, or 4.6x forward EV-to-EBITDA. If you’re considering JBI for your portfolio, see our FREE research report to learn more.
Market Cap: $1.15 billion
With around a century of experience, Blue Bird (NASDAQ:BLBD) is a manufacturer of school buses and complementary parts.
Why Is BLBD a Good Business?
Operating margin expanded by 7.6 percentage points over the last five years as it scaled and became more efficient
Incremental sales significantly boosted profitability as its annual earnings per share growth of 113% over the last two years outstripped its revenue performance
Returns on capital are climbing as management makes more lucrative bets
At $36.20 per share, Blue Bird trades at 8.8x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.
Market Cap: $410.4 million
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE:GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Is GHM a Top Pick?
Impressive 17% annual revenue growth over the last five years indicates it’s winning market share this cycle
Earnings growth has trumped its peers over the last two years as its EPS has compounded at 298% annually
Free cash flow margin grew by 5.6 percentage points over the last five years, giving the company more chips to play with
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