The industrial sector is poised to benefit significantly from the ongoing manufacturing resurgence driven by economic growth, industrialization, and advancements in technology. Given this backdrop, it could be wise to invest in fundamentally strong industrial stocks, WESCO International, Inc. (WCC), KBR, Inc. (KBR), and Berry Global Group, Inc. (BERY).

The expansion of manufacturing activities in emerging economies, the rise of Industry 4.0, and the increasing adoption of automation are the primary factors driving the industrial equipment market growth. The global industrial equipment market is expected to grow at a CAGR of 4.2% by 2031. Additionally, the global industrial services market is expected to expand at a CAGR of 8.6% by 2028.

Additionally, the industrial packaging market is expected to grow owing to the generating trends in the packaging industry, including digital printing and customized packaging. In addition, the rising demand for sustainable and reusable packaging solutions from the electronics industry is another factor to supplement the overall growth of the industrial packaging market. 

So, let us dive deep into the fundamentals of three industrial stocks.

WESCO International, Inc. (WCC)

WCC provides business-to-business distribution, logistics services, and supply chain solutions in the United States, Canada, and internationally. It operates through three segments: Electrical & Electronic Solutions (EES); Communications & Security Solutions (CSS); and Utility and Broadband Solutions (UBS).

On December 6, WCC announced it had completed its purchase of Ascent, a privately held company headquartered in St. Louis, Missouri, and a premier provider of data center facility management services. WCC previously announced its plan to acquire Ascent for a cash-free, debt-free purchase price of $185 million on October 31.

The stock’s trailing-12-month ROTC of 7.57% is 7.1% higher than the industry average of 7.07%. Similarly, its 1.43x trailing-12-month asset turnover ratio is 83.5% above the industry average of 0.78x.

WCC’s net sales were reported at $16.32 billion during the third quarter that ended September 30, 2024. The company’s income from operations came in at $922.10 million. Net income came in at $553.50 million and $10.02 per share.

Street expects WCC’s revenue and EPS for the fiscal first quarter ending March 2026 to be $5.43 billion and $3.15, respectively.

The stock has gained 14.1% over the past year to close the last trading session at $198.54.

WCC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

WCC has a B grade for Value. It is ranked #29 out of 89 stocks in the Industrial – Equipment industry. Click here to access the other WCC ratings for Growth, Momentum, Stability, Sentiment, and Quality.

KBR, Inc. (KBR)

KBR provides scientific, technology, and engineering solutions to governments and commercial customers globally. It operates in the Government Solutions and Sustainable Technology Solutions segments. It offers life-cycle support solutions to defense, intelligence, space, aviation, and other programs and missions for military and other government agencies.

The stock’s trailing-12-month levered FCF margin of 7.89% is 15.3% higher than the industry average of 6.84%. Similarly, its 20.87% trailing-12-month ROCE is 52.9% above the industry average of 13.65%.

KBR’s revenues increased 10% year-over-year to $1.95 billion for the third quarter that ended September 27, 2024. The company’s operating income grew 17.7% from the year-ago value to $173 million. Net income attributable to KBR came in at $100 million, and its adjusted EPS rose 12% from the prior year’s quarter to $0.84.

Analysts expect KBR’s revenue for the fourth quarter (ended December 2024) to grow 15.9% year-over-year to $2 billion. The consensus EPS estimate of $0.82 for the same period indicates an increase of 19.2% year-over-year.

The stock has gained 11.3% over the past year to close the last trading session at $59.36.

KBR’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.

KBR has an A grade for Momentum and a B for Growth and Value. It is ranked #13 out of 79 stocks in the Industrial – Services industry.

In addition to the POWR Ratings we’ve stated above, we also have KBR ratings for Stability, Quality, and Sentiment. Get all KBR ratings here.

Berry Global Group, Inc. (BERY)

BERY manufactures and supplies products in consumer and industrial end markets in the United States, Canada, Europe, and internationally. The company offers closures and dispensing systems, pharmaceutical devices and packaging, bottles and canisters, containers, and technical components. 

The stock’s trailing-12-month levered FCF margin of 6.97% is 36.1% higher than the industry average of 5.12%. Similarly, its 5.49% trailing-12-month ROTC is 12.6% above the industry average of 4.87%.

For the fiscal 2024 fourth quarter that ended September 28, 2024, BERY’s net sales increased 2.6% year-over-year to $3.17 billion. Its operating income came in at $269 million. The company’s net income came in at $148 million, while net income per share stood at $1.26.

Street expects BERY’s revenue and EPS for the first quarter ended December 2024 to be $2.36 billion and $1.01, respectively. Moreover, the company topped the consensus EPS estimates in three of the four trailing quarters.

Shares of BERY have surged 5.9% over the past month, closing the last trading session at $68.46.

BERY’s POWR Ratings reflect its bright outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. 

BERY has a B grade for Value and Growth. It is ranked #4 out of 19 stocks in the Industrial – Packaging industry. Click here to see the additional ratings for BERY (Stability, Sentiment, Quality, and Momentum).

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WCC shares were trading at $199.69 per share on Wednesday afternoon, up $1.15 (+0.58%). Year-to-date, WCC has gained 10.35%, versus a 3.65% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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