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, affecting their stock prices. That's a growing risk due to the surge in oil prices following the war with Iran.

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 5% while UPS's was nearly 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 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 trends specific to their industry, examining competitors, and evaluating a company's financial health and valuation.

5 Best Industrial Stocks to Buy in 2026

Best Industrial Stocks to Buy in 2026 and How to Invest in Them

By Matthew DiLallo – Updated Mar 19, 2026 at 4:13 PM EST | Fact-checked by Frank Bass

Key Points

Invest in industrials with strong balance sheets and durable demand drivers.
Focus on companies like WM and FedEx, noted for their resilience and steady cash flow generation.
Lockheed Martin will benefit from the continued growth in defense spending.

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 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.

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.

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

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Ticker Information Table
Name and ticker	Market cap	Dividend yield	Industry
WM (NYSE:WM)	$94.1 billion	1.47%	Commercial Services and Supplies
FedEx (NYSE:FDX)	$85.2 billion	1.62%	Air Freight and Logistics
GE Vernova (NYSE:GEV)	$245.5 billion	0.19%	Electrical Equipment
Lockheed Martin (NYSE:LMT)	$144.4 billion	2.15%	Aerospace and Defense
Caterpillar (NYSE:CAT)	$337.1 billion	0.82%	Machinery

Data as of Apr 8, 2026. Showing 5 of 5 tickers.

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NYSE: WM

Today's Change

(-0.81%) $-1.88

Current Price

$231.43

Key Data Points

Market Cap

$94B

Day's Range

$225.00 - $231.62

52wk Range

$194.11 - $248.13

Volume

2.5M

Avg Vol

2.2M

Gross Margin

29.08%

Dividend Yield

1.47%

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Waste Management (WM -0.75%), 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 enabled WM to consistently generate free cash flow, allowing it to fund acquisitions. It's 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. These investments drive its expectation of delivering nearly 30% free cash flow growth 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, 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

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NYSE: FDX

FedEx

Today's Change

(4.60%) $16.43

Current Price

$373.43

Key Data Points

Market Cap

$85B

Day's Range

$364.00 - $373.46

52wk Range

$194.29 - $392.86

Volume

1.9M

Avg Vol

Gross Margin

22.04%

Dividend Yield

1.62%

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FedEx (FDX +4.60%) 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 range of logistics and e-commerce services to help businesses deliver their products to customers.

FedEx generates substantial free cash flow, enabling it to pay a competitive, 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 in 2025 plans 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.

FedEx plans to deliver strong growth following the separation. It expects to grow its revenue at a 4% compound annual rate through 2029, while delivering double-digit compound annual earnings growth.

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3. Lockheed Martin

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NYSE: LMT

Lockheed Martin

Today's Change

(0.06%) $0.37

Current Price

$628.07

Key Data Points

Market Cap

$144B

Day's Range

$606.05 - $630.54

52wk Range

$410.11 - $692.00

Volume

59K

Avg Vol

1.8M

Gross Margin

11.04%

Dividend Yield

2.15%

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Lockheed Martin (LMT +0.13%) 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. The war with Iran in 2026 could drive global defense spending higher.

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, while boosting its share repurchase authorization by $2 billion, bringing its remaining available capacity to $9.1 billion.

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NYSE: CAT

Caterpillar

Today's Change

(6.51%) $47.14

Current Price

$771.58

Key Data Points

Market Cap

$337B

Day's Range

$753.10 - $774.40

52wk Range

$269.13 - $789.81

Volume

Avg Vol

2.8M

Gross Margin

32.21%

Dividend Yield

0.82%

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Caterpillar (CAT +6.51%) 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 +2.06%) 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

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NYSE: GEV

GE Vernova

Today's Change

(2.78%) $25.32

Current Price

$936.07

Key Data Points

Market Cap

$245B

Day's Range

$930.55 - $962.72

52wk Range

$281.56 - $962.72

Volume

2.3M

Avg Vol

2.9M

Gross Margin

20.28%

Dividend Yield

0.19%

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GE Vernova (GEV +2.78%) 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 components for 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 customers' turbines, providing the company with very stable cash flow.

The company raised its multi-year financial outlook in early 2026. It anticipates $52 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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Industrial stocks — Image source: Ychart.

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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 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.

Best Industrial Stocks to Buy in 2026 and How to Invest in Them

Key Points

Key Data Points

2. FedEx

Key Data Points

3. Lockheed Martin

Key Data Points

Key Data Points

5. GE Vernova

Key Data Points

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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

Read Next

Stocks Mentioned

Premium Investing Services

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?

Best Defense Stocks to Buy in 2026 and How to Invest in Them

Best Transportation Stocks for 2026 and How to Invest

Best Drone Stocks to Buy in 2026 and How to Invest in Them

Best Industrial ETFs to Buy in 2026: Are They Right for Your Portfolio?

Key Data Points

Top industrial stocks to consider

1. Waste Management

2. FedEx

3. Lockheed Martin

4. Caterpillar

5. GE Vernova

Types of Industrial Stocks

How to identify the best industrial companies

How to buy industrial stocks

Should you buy industrial company stocks?

Current Trends & Outlook

Related investing topics

FAQ

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Performance of industrial stocks over time