Are industrial stocks a good buy now?

As of mid-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.

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 mid-2026. Stanley Black & Decker's yield was above 3.5%; Paychex's was 4.5%; and 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 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 Jul 6, 2026 at 4:42 PM EST | Fact-checked by Frank Bass

Key Points

Industrial stocks tend to be cyclical, rising and falling with the economic cycle.
Invest in companies with durable demand, strong financials, and consistent investment through the cycle.
Top industrial stocks like WM, FedEx, and Lockheed Martin have excellent records of growing shareholder value.

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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 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)	$92.0 billion	1.55%	Commercial Services and Supplies
FedEx (NYSE:FDX)	$74.0 billion	1.52%	Air Freight and Logistics
GE Vernova (NYSE:GEV)	$309.6 billion	0.17%	Electrical Equipment
Lockheed Martin (NYSE:LMT)	$124.0 billion	2.54%	Aerospace and Defense
Caterpillar (NYSE:CAT)	$446.8 billion	0.62%	Machinery

Data as of Jul 7, 2026. Showing 5 of 5 total entries.

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NYSE: WM

Today's Change

(2.80%) $6.42

Current Price

$235.40

Key Data Points

Market Cap

$92B

Day's Range

$232.78 - $237.45

52wk Range

$194.11 - $248.13

Volume

24.8K

Avg Vol

2.2M

Gross Margin

29.17%

Dividend Yield

1.55%

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WM (WM +2.88%), 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 most 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, allowing it to fund its growth initiatives. 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

(1.07%) $3.31

Current Price

$313.24

Key Data Points

Market Cap

$74B

Day's Range

$309.50 - $313.94

52wk Range

$174.01 - $345.37

Volume

317.2K

Avg Vol

1.9M

Gross Margin

21.77%

Dividend Yield

1.52%

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FedEx (FDX +1.01%) 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 -3.12%) 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 make investments to expand its high-value operations.

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3. Lockheed Martin

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NYSE: LMT

Lockheed Martin

Today's Change

(-0.16%) $-0.88

Current Price

$537.12

Key Data Points

Market Cap

$124B

Day's Range

$536.60 - $547.14

52wk Range

$410.11 - $692.00

Volume

18.1K

Avg Vol

1.4M

Gross Margin

10.70%

Dividend Yield

2.54%

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Lockheed Martin (LMT -0.09%) 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, 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

(-5.21%) $-50.53

Current Price

$919.39

Key Data Points

Market Cap

$447B

Day's Range

$909.54 - $952.00

52wk Range

$391.52 - $1073.46

Volume

78.2K

Avg Vol

Gross Margin

31.90%

Dividend Yield

0.62%

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Caterpillar (CAT -5.38%) 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 +0.29%) 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

(-10.04%) $-115.61

Current Price

$1036.43

Key Data Points

Market Cap

$310B

Day's Range

$1028.00 - $1099.26

52wk Range

$511.50 - $1195.94

Volume

Avg Vol

2.7M

Gross Margin

20.16%

Dividend Yield

0.17%

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GE Vernova (GEV -10.04%) 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 $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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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

Key Data Points

2. FedEx

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3. Lockheed Martin

Key Data Points

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5. GE Vernova

Key Data Points

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Key Data Points

Investing in industrial stocks: FAQ

Are industrial stocks a good buy now?

What are the industrial stocks with the highest dividends?

What is considered an industrial stock?

Why are industrial stocks up?

Which industry is in high demand?

Should I invest in individual industrial stocks or ETFs?

How can investors research industrial stocks?

1. Waste Management

2. FedEx

3. Lockheed Martin

4. Caterpillar

5. GE Vernova

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?

Related investing topics

FAQ

5 top industrial stocks for 2026

Key Data Points

Key Data Points

Key Data Points

Key Data Points