With fears of a recession looming, investors might be wary of wading into the industrials sector of the economy. Because it relies heavily on economic growth to produce positive returns, the specter of further contraction has weighed on the segment's performance, which is down over 15% so far this year.

Yet that's ever so slightly better than the broad market S&P 500 index, which is down more than 17%, because production and capacity utilization jumped higher than their pre-pandemic levels as demand after the 2020 lockdowns surged.

Person holding a hard hat filled with money.

Image source: Getty Images.

That's why it's important to choose your investments carefully, picking up businesses in the space that have solid records to run on and may be significantly discounted to boot. It gives investors the chance to build a portfolio with great companies that, held onto for a decade or more, promise to generate superior returns.

The two industrial stocks below offer all that in spades.

ABM Industries

Janitorial services and facilities management leader ABM Industries (ABM 0.52%) is one of my favorite stocks because it's such an under-the-radar company that it goes unnoticed by large swaths of the market. Swabbing floors and disinfecting conference rooms just isn't as sexy as the latest biotech or electric car innovation.

Yet ABM has made a career out of putting in the work year after year and rewarding investors who have stuck by it. Founded over 100 years ago, the janitorial services specialist has seen it all in terms of the economy, the highs and lows, and the good and the bad. For the last 57 years it has shared its success with investors by paying a dividend, and has increased the payout for over 50 years, making it a Dividend King.

ABM's record of growing sales is solid because of a history of strong customer retention and strategic acquisitions to bolster the business. While inflation, a constrained job market, the ongoing supply chain crisis, and a possible recession all factor into near-term concerns, ABM still sees its momentum growing because of continued demand for its core janitorial services as well as its market-leading positioning, which attracts new customers. It reported an 11% gain in new sales bookings last quarter worth $795 million.

ABM Industries might ebb and flow a bit with the business cycle, but over the long haul this is a stock that can help investors clean up.

Emerson Electric

Emerson Electric (EMR 0.26%) is another example of an excellent business hiding in plain sight. 

Millions of consumers and professional tradespeople rely upon the quality of Home Depot's (HD -0.10%) store brand Ridgid without ever realizing it's made by Emerson. The same goes for other popular names like Greenlee and InSinkErator. Emerson also makes original equipment manufacturer replacement parts for well-respected HVAC companies like Carrier, Rheem, and Trane.

Emerson's another company with a long track record of growth, having been founded over 130 years ago. Like ABM, it is also a Dividend King, but having paid a dividend every year since 1947, it has raised the payout for 65 consecutive years. Today the dividend yields 2.5% annually.

The stock is down 22% from its all-time high hit last year, and is off 12% year to date. But there's good reason to expect it can buck current trends as it is seen as a stock that correlates closely to oil prices, particularly through its automation solutions segment.

While oil prices are down from their own recent highs, at around $100 a barrel they remain quite elevated on a historic basis and are expected to remain so for the foreseeable future. Emerson's automation business saw trailing three-month underlying orders jump 17% last quarter, and its segment backlog increased $400 million to $6.4 billion.

There's a baseball saying, "Hit 'em where they ain't," and Emerson Electric is an example of a stock investors can get into because there ain't many people going there. Holding it for decades to come is a move your portfolio will come to appreciate over time.