The stock market doesn't seem to know which way to go this year. After the worst first half since 1970, the S&P 500 index logged four straight weeks of gains. Then it was down again last week. If you're scratching your head wondering where the market will go next, you can stop. Instead, stay focused on the long game.

There are many industrial stocks offering buy-and-hold investors very attractive opportunities right now. Here are two currently unloved stocks in the sector that you can buy today.

Silhouettes of a bear and a bull against a background of stock prices.

Image source: Getty Images.


Generac (GNRC -0.67%) sells residential standby power and commercial generators. Its home standby units supply energy when electricity is cut off due to inclement weather, or rolling blackouts meant to aid our aging power grid during peak usage. The standby units also store solar energy that is converted to electricity to power homes and lower energy bills.

Generac will likely benefit from a few different long-term trends over the next several years. As energy consumption has risen, it has put enormous pressure on the U.S. power grid to handle the amped-up demand. For example, dangerously high temperatures are common in California, and when heat waves occur everyone wants to run their air conditioners, which risks overloading the grid. These can lead to rolling blackouts. These blackouts happen when utility companies intentionally cut power to homes to ensure the power grid doesn't collapse. In 2021, rolling blackouts in California left about 400,000 homes without power for two days. This summer Californians are being asked to temper their energy usage to avoid more blackouts.

If you look around your neighborhood, you'll probably see more residential solar panels than you have in the past. Over the last decade, solar has grown an average of 33% per year. Prices of solar panels have come down, which makes it much easier for residents to justify the up-front costs. Generac doesn't sell panels, but it does sell the inverters that turn solar energy into electricity and the battery packs that store it. These solar units not only save users money in the long haul, but help to avoid power outages.

Current energy trends have been around for a while, and Generac has taken advantage from the beginning. Since its initial public offering in 2010, the company's revenue has grown at a compound annual growth rate of 19%:

A bar chart showing Generac's annual sales since 2000.

Image source: Generac.

Here's the best part: Generac estimates that after years of growth, only about 5.5% of U.S. homes have standby units, providing a huge addressable market. As consumer attitudes toward climate change and energy usage evolve, Generac could have a long growth runway ahead.

Garrett Motion

Garrett Motion (GTX 0.75%) manufactures turbochargers that increase fuel efficiency in hybrid and gasoline cars and commercial vehicles. You might be thinking that electric vehicles (EVs), which don't use turbochargers, will eventually put an end to hybrids, but many drivers are reluctant to go fully electric because they question the charging infrastructure for long-haul trips. That concern applies to both cars and commercial vehicles; it stands to reason that the hybrid vehicle market is expected to grow by 9% annually through 2028.

In addition, gasoline-powered cars are likely to remain on the road for many years, even though new hybrid and EV sales will likely increase dramatically. The existing fleet of gasoline-powered vehicles will provide Garrett Motion with a healthy aftermarket opportunity.

In the meantime, the company is aware of the obvious trend in the car market. It is aggressively developing a segment that provides connected vehicle software, vehicle cybersecurity, and air compressors for hydrogen fuel cells.

Should you buy Generac or Garrett?

Generac's shares have fallen 42% over the last year. Investors may believe that rising interest rates make it harder for customers to finance Generac's units, or that a slowdown in the housing market could crimp sales. But trends helping the company can endure in the long run. Despite considerable macroeconomic uncertainty right now, Generac estimates that this year its revenue will grow between 36% and 40%. Growth investors may be getting a chance to buy the dip on its stock right now.

Garrett Motion seems to also be bucking the trend. The company recently increased its 2022 revenue growth estimates from between 1% and 6% to between 5% and 10%. What value investors might find even more appealing is that Garrett estimates full-year net income based on generally accepted accounting principles (GAAP) to fall in a range of $290 million to $335 million, which implies a mouthwatering forward price-to-earnings ratio of about 1.6. Though the company has some convertible preferred shares outstanding, which could dilute shareholders, it also has a $100 million share repurchase program that will buy back four preferred shares for every one common share.

These two stocks have something for everyone. Generac's bright future should appeal to growth investors, and Garrett to value investors. Regardless of the uncertainty and volatility in the market, long-term investors of any style can buy and hold these two stocks today.