Investing in Industrial Stocks

Waste Management, 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 allowed WM to consistently generate free cash flow, giving it the funds to make acquisitions. In late 2024, it acquired Stericycle to expand its comprehensive environmental solutions into the growing healthcare sector. It's also investing $3 billion through 2026 on new or upgraded recycling facilities and RNG production facilities.

The company also routinely returns money to shareholders via dividends and share repurchases while maintaining an investment-grade balance sheet. It hiked its dividend 10% for 2025, its 22nd straight year of increases. This strategy of expanding and also rewarding shareholders has enabled Waste Management to create significant shareholder value over the years.

FedEx produces lots of free cash flow, which allows the company to pay a competitive and 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 plans in 2025 to separate its FedEx Freight operations by creating a new publicly traded company. The company hopes to complete the separation within 18 months. The transaction will create two leading industrial companies and should unlock value for shareholders.

Lockheed Martin 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. Recent wars in Ukraine and the Middle East have increased global defense spending. That trend will likely continue as geopolitical tensions remain high.

Lockheed Martin also has an excellent record of returning cash to shareholders through dividends and repurchases. In late 2024, it delivered its 22nd annual dividend increase, while boosting its share repurchase authorization by $3 billion to a total of $10 billion.

Caterpillar 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 making progress on reducing carbon emissions.

Another major growth driver for Caterpillar is the increasing investment in infrastructure in the coming years. The U.S. is one of many countries that have boosted their spending on projects to maintain and expand highway and rail systems, bridges, and other infrastructure. The increased spending should drive more demand for construction equipment.

The company has continued to reward shareholders throughout economic cycles. It has raised its dividend for 31 consecutive years.

GE Vernova is an energy equipment manufacturing and services company. It 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 like natural gas turbines to customers to produce power.
• Wind: The company is a leader in producing wind turbines and other components to produce 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 turbines for customers, providing the company with very stable cash flow.

The industrials sector is the backbone of the economy. It performs three main functions:

• Manufacturing and distributing capital goods: This includes building products and machinery, as well as providing construction and engineering services.
• Providing commercial and professional services: This includes environmental and facility services, along with human resources and employment services.
• Providing transportation services: This includes operating an airline or railway.

1. Waste Management

2. FedEx

FedEx 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 host of other logistics and e-commerce services that help businesses distribute their products to customers.

3. Lockheed Martin

4. Caterpillar

5. GE Vernova

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