Are industrial stocks a good buy now?

As of early 2026, many industrial stocks were a good buy. The economy was still growing, which is key for industrial stocks. However, if the economy were to begin slowing, that could significantly reduce the growth of industrial companies, which would affect the performance of their stock prices.

What are the industrial stocks with the highest dividends?

UPS (NYSE: UPS), Stanley Black & Decker (NYSE: SWK), and Paychex (NYSE: PAYX) were the industrial stocks in the S&P 500 with some of the highest yields as of early 2026. Paychex and Stanley Black & Decker had yields approaching 4% while UPS's was more than 6%.

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 such as waste management, security services, and business support.

Why are industrial stocks up?

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

Which industry is in high demand?

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

Should I invest in individual industrial stocks or ETFs?

Investing in individual industrial stocks versus ETFs is more of a 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 seeking to understand their core operations, analyzing trends specific to their part of the industry, examining their competitors, and evaluating a company's financial health and valuation.

5 Best Industrial Stocks to Buy in 2026

Industrials are the companies that keep the economy running. They build and move essential goods, maintain critical systems, and provide services that businesses and governments rely on every day.

For investors, industrial stocks offer a mix of stability and cyclical upside. Some operate steady, cash-generating businesses that can hold up during 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.

Industrial stocks include 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.

Here are some of the best industrial stocks to consider, along with a framework for how to evaluate the sector.

Top industrial stocks to consider

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

Ticker Information Table
Name and ticker	Market cap	Dividend yield	Industry
WM (NYSE:WM)	$96.2 billion	1.78%	Commercial Services and Supplies
FedEx (NYSE:FDX)	$82.7 billion	1.65%	Air Freight and Logistics
GE Vernova (NYSE:GEV)	$217.0 billion	0.16%	Electrical Equipment
Lockheed Martin (NYSE:LMT)	$148.6 billion	2.09%	Aerospace and Defense
Caterpillar (NYSE:CAT)	$322.9 billion	0.86%	Machinery

Data as of Mar 14, 2026. Showing 5 of 5 tickers.

1. Waste Management

NYSE: WM

Today's Change

(0.36%) $0.85

Current Price

$238.52

Key Data Points

Market Cap

$96B

Day's Range

$237.20 - $240.59

52wk Range

$194.11 - $248.13

Volume

105K

Avg Vol

2.2M

Gross Margin

29.08%

Dividend Yield

1.78%

Waste Management (WM +0.36%), or WM, is one of the leading waste management companies in North America. It provides waste collection, transfer, and disposal services, as well as recycling and resource recovery. The company is also a leading developer and operator of landfill gas-to-energy facilities that produce renewable natural gas (RNG).

It provides its services to residential, commercial, industrial, and municipal customers. With demand for waste hauling relatively stable, its business is more recession-resistant than other industrial companies.

Over the years, WM has invested in automating its collection truck fleet and converting it to run on cleaner, cheaper natural gas, including RNG. Moves like these have allowed WM to consistently generate free cash flow, giving it the funds to make acquisitions. In late 2024, it acquired Stericycle to expand its comprehensive environmental solutions into the growing healthcare sector. It's also investing $3 billion through 2026 on new or upgraded recycling facilities and RNG production facilities, and plans to make another $100 million to $200 million of tuck-in acquisitions in 2026.

The company also routinely returns 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. 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

Today's Change

(-0.28%) $-0.97

Current Price

$352.16

Key Data Points

Market Cap

$83B

Day's Range

$348.83 - $355.41

52wk Range

$194.29 - $392.86

Volume

77K

Avg Vol

1.9M

Gross Margin

22.05%

Dividend Yield

1.65%

FedEx (FDX -0.28%) provides customers with transportation, e-commerce, and business services. The company operates a fleet of aircraft and vehicles, logistics facilities, and retail stores that help facilitate the shipment of millions of packages daily. It also offers a host of other logistics and e-commerce services that help businesses distribute their products to customers.

FedEx produces lots of free cash flow, which allows the company to pay a competitive and growing dividend. It can also repay debt to strengthen its balance sheet and make investments to expand its operations.

FedEx’s strong cash flow also enables the company to invest in innovation. The shipping company is testing autonomous vehicles and delivery services. Meanwhile, the company bought RouteSmart Technologies in 2025 to help further optimize delivery.

The company announced plans in 2025 to separate its FedEx Freight operations by creating a new publicly traded company. FedEx hopes to complete the separation within 18 months. The transaction will create two leading industrial companies and should unlock value for shareholders.

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3. Lockheed Martin

NYSE: LMT

Lockheed Martin

Today's Change

(-1.03%) $-6.71

Current Price

$646.13

Key Data Points

Market Cap

$149B

Day's Range

$641.00 - $659.01

52wk Range

$410.11 - $692.00

Volume

75K

Avg Vol

1.8M

Gross Margin

10.15%

Dividend Yield

2.09%

Lockheed Martin (LMT -1.03%) 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 on research and development (R&D) to advance the latest defense technology. It routinely complements its internal R&D program with acquisitions. In late 2024, the company acquired Terran Orbital to enhance its space capabilities. It also bought Amentum's Rapid Solutions business in 2025 to enhance its ability to deliver innovative defense technology.

The defense contractor should continue growing in the coming years. Recent wars in Ukraine and the Middle East have increased global defense spending. That trend will likely continue as geopolitical tensions remain high.

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

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4. Caterpillar

NYSE: CAT

Caterpillar

Today's Change

(-0.96%) $-6.76

Current Price

$693.93

Key Data Points

Market Cap

$323B

Day's Range

$687.33 - $706.63

52wk Range

$267.30 - $789.81

Volume

98K

Avg Vol

2.9M

Gross Margin

32.21%

Dividend Yield

0.86%

Caterpillar (CAT -0.96%) 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 -1.56%) 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 has raised its dividend for 32 consecutive years.

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5. GE Vernova

NYSE: GEV

GE Vernova

Today's Change

(-3.26%) $-27.09

Current Price

$805.02

Key Data Points

Market Cap

$217B

Day's Range

$802.76 - $845.29

52wk Range

$252.25 - $894.93

Volume

2.3M

Avg Vol

2.9M

Gross Margin

20.28%

Dividend Yield

0.16%

GE Vernova (GEV -3.26%) 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, like natural gas turbines, to customers to produce power.
Wind: The company is a leader in producing wind turbines and other components to produce wind energy.
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 turbines for customers, providing the company with a very stable cash flow.

The company raised its multi-year financial outlook in late 2025. It anticipates $52 billion in revenue and a 20% adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin by 2028, up from $45 billion and 14%, respectively. Powering that growth is strong demand for its gas turbines to support AI power demand.

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Industrial stocks — Image source: Ychart.

The practical takeaway for investors is simple: timing and quality matter more in cyclicals than in many other sectors.

How to identify the best industrial companies

The strongest industrial companies tend to share three traits:

Diversified operations: Less dependence on any single end market or customer base
Cost advantages: Efficient operations that hold up under inflation or weak demand
Strong balance sheets: Investment-grade credit and access to capital, which matters in a capital-intensive sector

Because industrial demand can drop quickly in a downturn, investors should pay close attention to how a company performs in stressful periods. Companies with strong liquidity and disciplined capital allocation are often in the best position to keep investing while competitors pull back.

How to buy industrial stocks

Anyone can buy industrial stocks. Here's a step-by-step guide on how to add one to your portfolio:

Open your brokerage app: Log in to your brokerage account where you handle your investments.
Search for the stock: Enter the ticker or company name 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.

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 near 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.

FAQ

Investing in industrial stocks FAQ

About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers 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.