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 2.5% over the past six months. This drawdown is a noticeable divergence from the S&P 500’s 10.8% return.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here are two industrials stocks we think can generate sustainable market-beating returns and one we would avoid.

One Industrials Stock to Sell:

ESAB (ESAB)

Market Cap: $5.00 billion

Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE: ESAB) manufactures and sells welding and cutting equipment for numerous industries.

Why Are We Wary of ESAB?

1. 4.2% annual revenue growth over the last two years was slower than its industrials peers
2. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
3. Diminishing returns on capital suggest its earlier profit pools are drying up

ESAB’s stock price of $80.44 implies a valuation ratio of 13.3x forward P/E. Dive into our free research report to see why there are better opportunities than ESAB.

Two Industrials Stocks to Buy:

Limbach (LMB)

Market Cap: $499.8 million

Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.

Why Is LMB a Top Pick?

1. Annual revenue growth of 15.6% over the past two years was outstanding, reflecting market share gains this cycle
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 20% outpaced its revenue gains
3. Industry-leading 21.3% return on capital demonstrates management’s skill in finding high-return investments, and its rising returns show it’s making even more lucrative bets

At $42.03 per share, Limbach trades at 11.3x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

First Solar (FSLR)

Market Cap: $22.23 billion

Headquartered in Arizona, First Solar (NASDAQ: FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.

What Makes FSLR Stand Out?

1. Impressive 19.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Free cash flow profile has moved into positive territory over the last five years, showing the company is at an important crossroads
3. Improving returns on capital reflect management’s ability to monetize investments

First Solar is trading at $207.54 per share, or 9.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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.