Industrial companies are often called the backbone of the economy. Year to date, they've also been the backbone of the stock market: As of late July, the sector has handily outpaced the broader S&P 500 (^GSPC -1.60%) with a 15% gain, almost double the index's return.
Analysts from FactSet have also put the sector at the very top for revenue growth through 2027 and second only to the energy sector in EPS growth. Although even the best industrial stocks are cyclical and volatile at times, they're certainly not a sleepy corner of the market right now.
If you didn't have a lot of money available to invest (say, just $100), but you were interested in buying into this sector, which industrial stocks should you consider? Here are two companies I'd give closer consideration to.
Image source: Archer Aviation.
1. Archer Aviation
Archer Aviation (ACHR -3.54%) is a California-based start-up building electric vertical takeoff and landing (eVTOL) aircraft. The company's goal is to bypass congested city streets with air taxi services that are fully electric. Think The Jetsons, except instead of flying cars that fold into your pocket, you get a battery-powered aircraft that cruises over traffic at about 150 miles per hour.
Pretty cool, right? The market seems to think so. The stock is trading up 150%-plus over the last 12 months, riding a wave of optimism around eVTOL technology.
In June, the company raised $850 million following a Trump administration executive order that calls for an accelerated rollout of eVTOL aircraft in the U.S. The company also has several partnerships with several heavyweight companies, including United Airlines, which hopes to fly its aircraft from airports into cities and back as part of its overall services to high-end customers, and Stellantis, which hopes to partner in the manufacture of Archer aircraft. And to top it all off, Archer was named the official air taxi service for the 2028 Los Angeles Olympics.
All this seems to suggest that Archer could be changing how people taxi from select locations. But before you get too excited, it's fair to point out that the company isn't profitable. Not even close. It's pre-revenue, burning cash, and still hoping to get through a complex regulatory environment. And even with powerful partners in its corner, flawless execution is needed to turn its prototypes into real, profitable air taxi routes.
With a $6.8 billion market cap (as of this writing), Archer's valuation nearly matches its supposed $6 billion order backlog, which it reported at the end of Q3 2024, signaling strong demand but pricing in a future that hinges on delivering these "contracts" without any hangups. Still, it's an industrial stock I'd watch closely, as one breakthrough -- like a major route deal -- could be what sends it soaring.
2. United Parcel Service
United Parcel Service (UPS -1.86%) is a logistics giant that's navigating choppy economic waters at the moment. The stock price is down over 18% in 2025, trailing the S&P 500's 8.3% gain. After a rough 2023, which included a costly labor deal, and a rough 2024 in which the company reported declining freight volume and cut its guidance, a fresh start in 2025 was much needed.
Management has been making tough calls -- ones that have surprised investors but make sound business sense. For one, it's in the midst of a $3.5 billion cost reduction effort, which involves trimming about 20,000 jobs and closing 73 facilities. It's also scaling back its relationship with Amazon, a company that made up about 12% of UPS' 2024 revenue, but has brought in thinner margins than the premium services UPS wants to prioritize.
These moves are already starting to show up in the numbers. In Q2 2025, UPS reported a consolidated operating profit of $1.7 billion, up 3.3% from the previous quarter, despite a 0.7% decrease in revenue.
At today's valuation, the stock trades at 15 times trailing earnings, a steep discount to its historical average and well below the industrial sector's average of 28. With costs coming down, margins expanding, and a 6.4% dividend yield to cushion the wait, this might be one of the better places to put your $100.
