Are industrial stocks a good buy now?

As of early September 2026, many industrial stocks were a good buy. The economy was still growing, which is key for industrial stocks. Further, the heavy investment in AI data centers is benefiting the industrial sector, driving demand for everything from construction equipment (Caterpillar) to gas turbines (GE Vernova) to logistics (FedEx). However, if the economy were to begin slowing, the industrial sector could slow significantly, affecting stock prices. That's a higher risk following the surge in oil prices due to the war with Iran. It's keeping inflation elevated, which could prompt the Federal Reserve to raise interest rates. Higher rates tend to slow economic growth.

What are the industrial stocks with the highest dividends?

UPS (NYSE: UPS), Stanley Black & Decker (NYSE: SWK), and Paychex (NYSE: PAYX) were among the industrial stocks in the S&P 500 with the highest yields as of early September 2026. Stanley Black & Decker's yield was approaching 4%; Paychex's was over 4%; and UPS's was around 6.5%.

What is considered an industrial stock?

An industrial stock is a company that does one of the following:Produces capital goods (e.g., manufacturers' machinery and equipment) used by other businesses.Provides transportation by moving people and goods (e.g., airlines, railroads, logistics, and freight companies).Offers commercial services including waste management, security, and business support.

Why are industrial stocks up?

Industrial stocks are up because the economy is growing. An expanding economy increases demand for industrial goods and services, boosting industrial stock prices.

Which industry is in high demand?

The technology industry is in high demand. Companies are investing heavily in digitalizing their businesses through cloud computing and integrating new technologies such as AI.

Should I invest in individual industrial stocks or ETFs?

Investing in individual industrial stocks versus ETFs is a matter of personal preference. If you want to passively invest in the industrial sector, ETFs are the better option. However, if you're seeking the highest total return potential, you should consider investing in individual industrial stocks that you believe have the best long-term growth prospects.

How can investors research industrial stocks?

Investors should research industrial stocks by understanding their core operations, analyzing industry-specific trends, examining competitors, and evaluating a company's financial health and valuation.

5 Best Industrial Stocks for 2026 and How to Invest

By Matthew DiLallo – Updated Sep 11, 2026 at 4:36 PM EST | Fact-checked by Frank Bass

Key Points

The top industrial stocks have multi-year dividend growth records.
They offer exposure to secular growth trends, including AI infrastructure and energy transition.
They generate durable, growing cash flows that support continued reinvestment throughout economic cycles.

Industrial stocks are publicly traded companies that build and move essential goods, maintain critical systems, and provide services that businesses and governments rely on every day. The sector includes companies across a wide range of real-economy activities, such as commercial and professional services, transportation and logistics, aerospace and defense, industrial machinery, construction equipment, electrical equipment, and waste management. Because the sector touches so many parts of the economy, industrial performance often reflects broader business conditions, making company quality and financial strength especially important.

For investors, industrial stocks offer a mix of stability and cyclical upside. Some operate steady, cash-generating businesses that can withstand downturns. Others are more sensitive to economic growth, benefiting when construction, manufacturing, and global trade accelerate. The best long-term industrial investments tend to share a few traits: durable demand, strong balance sheets, and the ability to keep investing through economic cycles.

Here are some of the best industrial stocks to consider investing in this year.

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Global business logistics with container cargo freight ship. — Getty Images.

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5 top industrial stocks for 2026

The industrial industry is a very broad sector that includes the following types of companies:

Capital goods and machinery: Companies that produce machinery, tools, and equipment used by other industries, such as farm and heavy construction machinery.
Aerospace and defense: Companies that design and manufacture aircraft, missiles, and defense systems for commercial and military customers.
Transportation and logistics: Companies that operate railroads, air freight, and shipping services.
Construction and engineering: Companies that provide engineering and construction services, as well as those that supply materials for construction, such as cement, steel, and electrical equipment.
Commercial and professional services: Companies that provide services to other businesses, including waste management, security services, and staffing.
Industrial conglomerates: Companies that operate in several industrial sectors.

Here are some of the industrial sector’s most durable long-term investments:

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Ticker Information Table
Name and ticker	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.	Dividend yield	Industry
WM (NYSE:WM)	$85.3 billion	2.10%	Commercial Services and Supplies
FedEx (NYSE:FDX)	$73.8 billion	1.14%	Air Freight and Logistics
GE Vernova (NYSE:GEV)	$255.0 billion	0.18%	Electrical Equipment
Lockheed Martin (NYSE:LMT)	$121.0 billion	2.63%	Aerospace and Defense
Caterpillar (NYSE:CAT)	$376.3 billion	0.75%	Machinery

Data as of Sep 14, 2026. Showing 5 of 5 total entries.

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1. Waste Management

NYSE: WM

Premium Feature

Moneyball Superscore

81/100

Today's Change

(2.17%) $4.63

Current Price

$218.09

Key Data Points

Market Cap

$85B

Day's Range

$215.71 - $219.11

52wk Range

$194.11 - $248.13

Volume

2.5M

Avg Vol

2.1M

Gross Margin

29.15%

Dividend Yield

2.10%

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WM (WM +2.17%), formerly Waste Management, is North America's leading provider of environmental solutions. It provides waste collection, recycling, and disposal services to residential, industrial, medical, and municipal customers across the U.S. and Canada. WM has the largest disposal network, collection fleet, and recycling operations in North America. It also has a growing network of renewable natural gas (RNG) plants, the largest number of landfill gas-to-electricity plants, and the largest heavy-duty natural gas truck fleet in the industry.

The company's large-scale operations enable it to consistently generate free cash flow, which funds its growth initiatives. It's investing $3 billion through 2026 in new or upgraded recycling and RNG production facilities and plans to make another $100 million to $200 million in tuck-in acquisitions in 2026. These investments drive its expectation of delivering nearly 30% free cash flow growth in 2026.

WM is one of the least cyclical industrial stocks. That has made it easier for the company to routinely return money to shareholders via dividends and share repurchases while maintaining an investment-grade balance sheet. It hiked its dividend 14.5% for 2026 -- its 23rd straight year of increases -- and approved a new $3 billion share repurchase authorization, supporting its plan to return $3.5 billion in cash to shareholders in 2026. This strategy of expanding and also rewarding shareholders has enabled WM to create significant shareholder value over the years.

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2. FedEx

NYSE: FDX

FedEx

Premium Feature

Moneyball Superscore

78/100

Today's Change

(0.58%) $1.80

Current Price

$312.57

Key Data Points

Market Cap

$74B

Day's Range

$309.80 - $313.45

52wk Range

$180.68 - $345.37

Volume

1.1M

Avg Vol

1.8M

Gross Margin

21.77%

Dividend Yield

1.14%

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FedEx (FDX +0.58%) provides customers with transportation, e-commerce, and business services. About 70% of its revenue comes from its U.S. domestic business, where it has a leading, integrated network. The company also has a growing international business (30% of its revenue), which includes its U.S. export business.

The company has been streamlining its portfolio over the past year by selling and spinning off parts of its business. In July 2026, FedEx completed the spinoff of FedEx Freight (FDXF +0.88%) as an independent, focused leader in the North American less-than-truckload industry. The company also sold FedEx Supply Chain to CMA CGM Group in July 2026, which will become its preferred ocean carrier.

Those moves are helping sharpen FedEx's focus on high-value verticals, including healthcare, automotive, aerospace, and data centers. The company is a market leader in healthcare logistics with over $9 billion in annual revenue. However, that's a fraction of the $120 billion total addressable market opportunity it sees in the sector. FedEx also sees a $25 billion opportunity in supporting automotive supply chains, a $7 billion data center and IT opportunity, and an $11 billion opportunity in the aerospace sector.

FedEx's business generates substantial, growing free cash flow. It expects to produce $3.8 billion in 2026, growing to $6 billion by 2029. That will allow it to pay a competitive, growing dividend, strengthen its balance sheet, and invest in expanding its high-value operations.

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3. Lockheed Martin

NYSE: LMT

Lockheed Martin

Premium Feature

Moneyball Superscore

78/100

Today's Change

(0.99%) $5.19

Current Price

$529.38

Key Data Points

Market Cap

$121B

Day's Range

$525.42 - $532.34

52wk Range

$437.25 - $692.00

Volume

970.3K

Avg Vol

1.2M

Gross Margin

12.66%

Dividend Yield

2.63%

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Lockheed Martin (LMT +0.99%) is a leading global security and aerospace company. It researches, designs, develops, and manufactures advanced technology systems, products, and services, primarily for government customers. The defense contractor has four main business segments: aeronautics, missiles and fire control, rotary and mission systems, and space.

The company invests billions of dollars annually in research and development (R&D) to advance the latest defense technology. It routinely complements its internal R&D program with acquisitions. In July 2026, Lockheed Martin agreed to acquire Ultra Maritime for $3.5 billion. The company specializes in advanced undersea warfare and anti-submarine warfare.

Lockheed Martin also has an excellent record of returning cash to shareholders through dividends and repurchases. In late 2025, it delivered its 23rd consecutive dividend increase and boosted its share repurchase authorization by $2 billion, bringing its remaining available capacity to $9.1 billion.

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4. Caterpillar

NYSE: CAT

Caterpillar

Premium Feature

Moneyball Superscore

85/100

Today's Change

(-4.22%) $-34.57

Current Price

$784.00

Key Data Points

Market Cap

$376B

Day's Range

$772.86 - $794.56

52wk Range

$430.61 - $1073.46

Volume

2.4M

Avg Vol

3.1M

Gross Margin

32.83%

Dividend Yield

0.75%

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Caterpillar (CAT -4.22%) is a leading global manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company has three operating segments: construction industries, resource industries, and energy and transportation. It also provides financing and related services.

Caterpillar is working toward making more sustainable equipment. It’s collaborating with companies in the rail, energy, mining, and technology sectors on developing new technologies with lower carbon emissions. For example, it’s working on both battery- and hydrogen-powered locomotives. It’s also developing zero-emission haul trucks and equipment for the mining industry. The focus on sustainability will be a major growth driver for Caterpillar in the coming years as the global economy continues to make progress on reducing carbon emissions.

Another major growth driver for Caterpillar is robotics. In early 2026, the company expanded its collaboration with Nvidia (NVDA -3.36%) to revolutionize heavy industry with physical artificial intelligence (AI) and robotics. Caterpillar also introduced its intelligent machines product line in early 2026 to transform the construction industry.

The company has continued to reward shareholders throughout economic cycles. It delivered its 32 consecutive annual dividend increase in July 2026.

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5. GE Vernova

NYSE: GEV

GE Vernova

Premium Feature

Moneyball Superscore

81/100

Today's Change

(-8.62%) $-82.51

Current Price

$874.76

Key Data Points

Market Cap

$255B

Day's Range

$868.25 - $892.81

52wk Range

$530.16 - $1195.94

Volume

3.3M

Avg Vol

2.6M

Gross Margin

20.16%

Dividend Yield

0.18%

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GE Vernova (GEV -8.62%) is an energy equipment manufacturing and services company. It was formed in 2024 after the once-mighty industrial giant GE completed its breakup. GE Vernova is the former GE Power and GE Renewable Energy businesses.

The company has three business segments:

Power: It provides electricity generation solutions, such as natural gas turbines, to customers.
Wind: The company is a leader in the production of wind turbines and other wind energy components.
Electrification: It developed solutions to help modernize and digitize the electric grid.

GE Vernova's products currently produce about 25% of the world's electricity. It manufactures turbines (natural gas and wind), positioning it to grow as demand for lower-carbon energy rises. It also services its customers' turbines, providing the company with very stable cash flow.

The company raised its multi-year financial outlook in early 2026. It anticipates $56 billion in revenue and at least $24 billion in free cash flow by 2028, up from $52 billion and $22 billion, respectively. Powering that growth is strong demand for its gas turbines to support AI.

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How to buy industrial stocks

Here's a step-by-step guide on how to buy industrial stocks:

Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
Search for the stock: Enter the ticker into the search bar to bring up the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Benefits and risks of investing in industrial stocks

Investing in industrial stocks has its share of pros and cons. Some of the benefits include:

Growth potential: Many industrial stocks grow as the economy expands, with some benefitting from secular growth trends, including the transition to lower-carbon energy and AI data center expansion.
Income: Despite the sector's cyclicality, many industrial stocks have long records of dividend growth.
Defensive: Some industrial stocks are counter-cyclical (e.g., waste collection and aerospace and defense), making them more defensive holdings.

On the other hand, here are some cons of investing in industrial stocks:

Cyclical: Many industrial companies are cyclical, delivering lower revenue and earnings during economic downturns.
Capital-intensive: Cyclical companies often need to invest substantial capital to maintain and expand their operations, which can limit their ability to return cash to shareholders.
Slower growth: Industrial companies tend to grow more slowly than other sectors, such as technology.

Methodology: How these stocks were chosen

To build this list, I screened industrial companies on four traits:

A multi-year record of dividend growth, ideally showcasing growth through at least the last recession.
Positive and expanding free cash flow, with the likelihood of continued growth.
Exposure to durable secular growth trends beyond the normal economic cycle (i.e., AI-linked infrastructure demand and the clean energy transition).
The financial strength to continue reinvesting in the business through capital spending and acquisitions and returning cash to shareholders (buybacks and dividends), even during recessions.

These companies scored well across these criteria.

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Should you buy industrial company stocks?

Industrial stocks can be a good fit if you want exposure to the real economy and are comfortable with some cyclical volatility.

They may be a better fit for you if:

You want a mix of dividend income and long-term growth
You can hold through economic cycles
You prefer businesses with tangible demand drivers and pricing power

You may want to be more cautious if:

You need short-term stability
You are investing heavily in the early stages of a recession
You are uncomfortable with cyclical drawdowns

If you want diversification without choosing individual stocks, industrial ETFs can also provide broad exposure.

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Investing in industrial stocks: FAQ

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About the Author

Matt DiLallo has been a contributing Motley Fool stock analyst specializing in the energy, industrials, and real estate sectors since 2012. He also covers dividend-paying stocks, pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

TMFmd19

@MatthewDiLallo

Matt DiLallo has positions in FedEx and WM. The Motley Fool has positions in and recommends Caterpillar, Ge Vernova, and Nvidia. The Motley Fool recommends FedEx, Lockheed Martin, and WM. The Motley Fool has a disclosure policy.

5 Best Industrial Stocks for 2026 and How to Invest

Key Points

5 top industrial stocks for 2026

1. Waste Management

Key Data Points

2. FedEx

Key Data Points

3. Lockheed Martin

Key Data Points

4. Caterpillar

Key Data Points

5. GE Vernova

Key Data Points

How to buy industrial stocks

Benefits and risks of investing in industrial stocks

Methodology: How these stocks were chosen

Should you buy industrial company stocks?

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Investing in industrial stocks: FAQ

Are industrial stocks a good buy now?

Are industrial stocks a good buy now?

What are the industrial stocks with the highest dividends?

What are the industrial stocks with the highest dividends?

What is considered an industrial stock?

What is considered an industrial stock?

Why are industrial stocks up?

Why are industrial stocks up?

Which industry is in high demand?

Which industry is in high demand?

Should I invest in individual industrial stocks or ETFs?

Should I invest in individual industrial stocks or ETFs?

How can investors research industrial stocks?

How can investors research industrial stocks?

About the Author

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5 top industrial stocks for 2026

Key Data Points

How to buy industrial stocks

Benefits and risks of investing in industrial stocks

Methodology: How these stocks were chosen

Should you buy industrial company stocks?

8 Best Defense Stocks for 2026 and How to Invest

4 Best Transportation Stocks for 2026 and How to Invest

6 Best Drone Stocks for 2026 and How to Invest

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Investing in industrial stocks: FAQ

Are industrial stocks a good buy now?

Are industrial stocks a good buy now?

What are the industrial stocks with the highest dividends?

What are the industrial stocks with the highest dividends?

What is considered an industrial stock?

What is considered an industrial stock?

Why are industrial stocks up?

Why are industrial stocks up?

Which industry is in high demand?

Which industry is in high demand?

Should I invest in individual industrial stocks or ETFs?

Should I invest in individual industrial stocks or ETFs?

How can investors research industrial stocks?

How can investors research industrial stocks?

Key Data Points

Key Data Points

Key Data Points

Key Data Points