Best mid-cap industrial stocks to invest in 2025

The mid-cap industrial sector offers a compelling mix of innovation, resilience, and growth potential. From infrastructure development to waste management, these companies are driving progress across critical industries.

Modine Manufacturing is at the forefront of thermal management solutions, serving diverse sectors such as automotive, industrial, and data centers. Its focus on energy-efficient technologies positions it well in the transition to greener industries. Sterling Infrastructure, a leader in engineering and construction services, is benefiting from increased government spending on infrastructure and renewable energy projects, bolstering its long-term growth outlook. Tecnoglass, a global leader in architectural glass and aluminum products, continues to grow through its focus on North American markets and the increasing adoption of energy-efficient building materials.

These standout mid-cap industrial companies exemplify adaptability and growth, making them attractive picks for investors looking to capitalize on evolving industry trends in 2025. Explore our in-depth analysis to see how these firms can enhance your investment strategy.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in top 10 stocks mentioned in this article 5 years ago.

Now, let`s take a closer look at each of the companies:

  • Modine Manufacturing (MOD)

    Modine Manufacturing Company is a leading provider of thermal management solutions, specializing in heating, cooling, and ventilation systems for a variety of industries. Founded in 1916 by Arthur B. Modine in Racine, Wisconsin, the company has grown into a global enterprise with operations in North America, Europe, and Asia. Headquartered in Milwaukee, Wisconsin, Modine serves markets including automotive, commercial HVAC, industrial equipment, and data centers.

    Modine's core business revolves around designing and manufacturing innovative thermal management solutions that improve energy efficiency and sustainability. The company produces radiators, heat exchangers, HVAC systems, and battery thermal management technologies for electric vehicles. By focusing on cutting-edge engineering and environmental responsibility, Modine continues to provide high-performance solutions that meet the evolving demands of modern industries.

    Modine Manufacturing financial statements

    Analysts recommendation: 1.25

    Financial Health

    • Return on assets (ROA): 9.76%
    • Return on equity (ROE): 22.2%
    • Return on investment (ROI): 14.29%

    Profitability

    • Gross margin: 25.14%
    • Operating margin: 12.07%
    • Net profit margin: 7.12%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 3.41
    • EPS estimate (next quarter): 0.97
    • EPS growth (this year): 11.18%
    • EPS growth (next year): 22.61%
    • EPS growth (next 5 years): N/A
    • EPS growth (quarter-over-quarter): 91.87%
    • Sales growth (past 5 years): 5.51%
    • Sales growth (quarter-over-quarter): 7.24%

    💡 Why invest in Modine Manufacturing?

    Modine's unique position in the thermal management industry offers several potential advantages for investors seeking exposure to a stable and growing sector:

    • Essential Services: Heating and cooling are fundamental needs for buildings and some vehicles, making Modine's products essential year-round.
    • Focus on Sustainability: Modine prioritizes energy-efficient solutions, aligning with the growing demand for green buildings and eco-conscious practices.
    • Diversified Product Portfolio: They offer a wide range of HVAC systems and components catering to various needs, reducing reliance on any single market or technology trend.
    • Global Reach: Modine operates facilities across the world, offering exposure to a wider market and potential for further expansion.

    🐌 Key considerations before investing in Modine Manufacturing

    However, before investing in Modine, it's crucial to consider these potential challenges:

    • Competition: The thermal management industry is competitive, with established players and smaller regional manufacturers vying for market share.
    • Dependence on Construction Industry: Modine's sales in the building sector can be impacted by economic downturns and fluctuations in construction spending.
    • Commodity Price Fluctuations: The cost of raw materials used in Modine's products can fluctuate, impacting their profitability.
    • Regulation: The HVAC industry is subject to various regulations regarding energy efficiency and safety standards, which can add complexity and cost to product development.

    Final thoughts on Modine Manufacturing

    Modine Manufacturing Company's focus on essential climate control solutions, their commitment to sustainability, and the overall stability of the building and industrial HVAC market paint a promising picture for long-term investors seeking exposure to this foundational aspect of infrastructure. However, the competitive landscape, dependence on construction spending, commodity price fluctuations, and regulatory environment necessitate careful consideration. Thorough research on Modine's product development roadmap, their strategies to expand into new markets, a clear understanding of overall economic and construction industry trends, and the evolving regulatory landscape are crucial before adding them to your portfolio. Remember, sometimes the most comfortable environments rely on the unseen heroes of thermal management. Modine Manufacturing Company could be the steady foundation that drives your investment journey towards a balanced portfolio, but be sure to assess the potential risks before investing.

  • Rolls-Royce Holdings (L:RR)

    Rolls-Royce Holdings plc is a British multinational aerospace and defense company that designs, manufactures, and services power systems for aviation, naval, and land-based defense applications worldwide. Founded in 1906 and headquartered in London, the company has established itself as one of the world's leading providers of military engines, propulsion systems, and defense technologies for NATO allies and international defense customers. The company has demonstrated strong recovery and growth momentum following strategic restructuring, with expanding defense order books and increasing demand for military propulsion systems.

    The company's defense portfolio encompasses jet engines for military aircraft including the F-35 Lightning II, Eurofighter Typhoon, and various transport aircraft, as well as naval propulsion systems for submarines, destroyers, and aircraft carriers used by allied navies. Rolls-Royce also provides land-based power systems for military installations and specialized defense applications. With rising global defense expenditure and increasing demand for advanced military propulsion technologies, Rolls-Royce is strategically positioned to capitalize on military modernization programs and the growing need for next-generation defense systems across air, sea, and land domains.

    Rolls-Royce Holdings financial statements

    Analysts recommendation: 2.3

    Financial Health

    • Return on assets (ROA): 3.2%
    • Return on equity (ROE): 12.8%
    • Return on investment (ROI): 5.9%

    Profitability

    • Gross margin: 18.7%
    • Operating margin: 8.4%
    • Net profit margin: 4.1%

    Growth

    • EPS (past 5 years): -8.4%
    • EPS (current): 0.28
    • EPS estimate (next quarter): 0.32
    • EPS growth (this year): 78.9%
    • EPS growth (next year): 35.2%
    • EPS growth (next 5 years): 28.6%
    • EPS growth (quarter-over-quarter): 82.3%
    • Sales growth (past 5 years): 2.1%
    • Sales growth (quarter-over-quarter): 12.8%

    💡 Why invest in Rolls-Royce Holdings?

    Like a powerful turbine that generates thrust across multiple defense platforms, Rolls-Royce Holdings demonstrates several compelling strengths that make it an attractive investment in the global defense propulsion sector.

    • Defense Engine Dominance: Rolls-Royce powers critical military aircraft including the F-35, Eurofighter Typhoon, and C-130J, creating decades of predictable aftermarket revenue through maintenance and spare parts with substantial barriers to entry.
    • Multi-Domain Defense Portfolio: The company's defense capabilities span air, sea, and land, including jet engines, naval propulsion systems, and power generation, reducing reliance on a single program and enabling cross-selling opportunities.
    • Strategic Defense Partnerships: Rolls-Royce maintains long-term partnerships with major defense contractors like Lockheed Martin, BAE Systems, and Boeing, ensuring integration into next-generation platforms and early access to opportunities.
    • Advanced Propulsion Technology: The company leads in developing next-generation military propulsion including adaptive cycle engines and hybrid-electric systems, creating opportunities for premium pricing and technology leadership.

    🐌 Key considerations before investing in Rolls-Royce Holdings

    However, like navigating through turbulent airspace where multiple challenges can impact flight performance, Rolls-Royce Holdings faces several significant risks that defense investors must carefully assess.

    • Defense Program Concentration: Heavy dependence on major defense programs like the F-35 creates concentration risk, as delays, budget cuts, or cancellations could substantially impact revenue while military priority changes reduce demand.
    • Competitive Defense Market: Rolls-Royce faces intense competition from General Electric, Pratt & Whitney, and Safran, plus emerging technology companies developing alternative propulsion solutions that pressure margins.
    • Cyclical Recovery Execution: The company must continue executing its transformation strategy while managing challenges of returning to sustainable profitability following financial difficulties and restructuring efforts.
    • Technology Transition Risk: Rapid technological change toward electric propulsion and autonomous systems could disrupt traditional jet engine markets, requiring substantial investment with uncertain market demand.

    Final thoughts on Rolls-Royce Holdings

    Rolls-Royce Holdings' leadership in military propulsion systems, multi-domain defense portfolio, and strategic partnerships create compelling opportunities for investors seeking exposure to the growing global defense market. However, the company's program concentration risks, competitive pressures, execution challenges, and technology transition requirements demand careful evaluation of the complex dynamics in aerospace and defense markets. Like a skilled pilot who combines technical expertise with strategic navigation, Rolls-Royce leverages its engineering excellence and defense relationships to power through market turbulence while positioning for long-term success in the evolving defense landscape.

  • GMS (GMS)

    GMS Inc. is a leading North American distributor of specialty building materials, primarily focused on wallboard, ceilings, steel framing, and complementary construction products. Founded in 1971 and headquartered in Tucker, Georgia, the company has grown into a key supplier for residential, commercial, and industrial construction projects. With a vast network of distribution centers across the U.S. and Canada, GMS provides contractors and builders with high-quality materials and expert service.

    The company's core business revolves around sourcing, stocking, and delivering construction materials efficiently to meet the evolving needs of the industry. By leveraging strong supplier relationships and a customer-centric approach, GMS ensures timely product availability and customized solutions. As construction demand continues to grow, GMS remains committed to expanding its market presence and driving long-term value through strategic acquisitions and operational excellence.

    GMS financial statements

    Analysts recommendation: 2.33

    Financial Health

    • Return on assets (ROA): 4.13%
    • Return on equity (ROE): 10.37%
    • Return on investment (ROI): 4.83%

    Profitability

    • Gross margin: 28.59%
    • Operating margin: 6.22%
    • Net profit margin: 2.61%

    Growth

    • EPS (past 5 years): 38.73%
    • EPS (current): 3.61
    • EPS estimate (next quarter): 1.11
    • EPS growth (this year): -27.45%
    • EPS growth (next year): 2.93%
    • EPS growth (next 5 years): -1.79%
    • EPS growth (quarter-over-quarter): -143.17%
    • Sales growth (past 5 years): 12.04%
    • Sales growth (quarter-over-quarter): 0.19%

    💡 Why invest in GMS?

    GMS Inc.'s unique position in the building materials distribution market offers several potential advantages for investors seeking exposure to the construction industry:

    • Essential Products: Gypsum wallboard and other building materials are fundamental to construction, making GMS a vital player in the industry.
    • Diversified Product Offering: Beyond wallboard, GMS distributes a wide range of products, reducing reliance on a single product category.
    • Extensive Distribution Network: With a vast network of distribution centers, GMS can efficiently serve customers across the country.
    • Growth Potential: The construction industry, especially residential construction, has shown growth potential, benefiting distributors like GMS.

    🐌 Key considerations before investing in GMS

    However, before investing in GMS, it's crucial to consider these potential challenges:

    • Economic Sensitivity: The construction industry is cyclical, and economic downturns can impact demand for building materials.
    • Competition: The building materials distribution market is competitive, with both national and regional players vying for market share.
    • Supply Chain Disruptions: Issues with transportation, raw material availability, or manufacturing can impact product availability and costs.
    • Regulatory Environment: Building codes and environmental regulations can influence product demand and costs.

    Final thoughts on GMS

    GMS's focus on essential building materials, their extensive distribution network, and the overall growth potential of the construction industry paint a promising picture for long-term investors. However, the cyclical nature of the construction industry, competition, supply chain risks, and regulatory factors necessitate careful consideration. Thorough research on GMS's expansion plans, their customer base diversification efforts, and a clear understanding of overall economic and construction industry trends are crucial before adding them to your portfolio. Remember, sometimes the strongest structures are built on a solid foundation of essential materials. GMS could be the cornerstone of your investment journey in the construction sector, but be sure to assess the potential risks before investing.

  • Applied Industrial Technologies (AIT)

    Applied Industrial Technologies is a leading distributor and service provider of industrial motion, fluid power, and automation solutions. Founded in 1923 and headquartered in Cleveland, Ohio, the company has grown into a global supplier serving a wide range of industries, including manufacturing, energy, and transportation. With a strong emphasis on technical expertise and customer service, Applied Industrial Technologies helps businesses enhance operational efficiency and productivity.

    The company's core business focuses on distributing industrial components such as bearings, power transmission products, fluid power solutions, and industrial automation systems. In addition to its vast product portfolio, Applied Industrial Technologies offers engineering support, system integration, and maintenance services to optimize performance and reduce downtime. By leveraging its extensive network and industry knowledge, the company continues to provide innovative solutions that drive industrial success worldwide.

    Applied Industrial Technologies financial statements

    Analysts recommendation: 1.56

    Financial Health

    • Return on assets (ROA): 13.02%
    • Return on equity (ROE): 22.23%
    • Return on investment (ROI): 16.19%

    Profitability

    • Gross margin: 29.06%
    • Operating margin: 12%
    • Net profit margin: 8.64%

    Growth

    • EPS (past 5 years): 21.73%
    • EPS (current): 9.97
    • EPS estimate (next quarter): 2.63
    • EPS growth (this year): 1.97%
    • EPS growth (next year): 6.93%
    • EPS growth (next 5 years): 6.08%
    • EPS growth (quarter-over-quarter): 3.73%
    • Sales growth (past 5 years): 5.22%
    • Sales growth (quarter-over-quarter): 1.78%

    💡 Why invest in Applied Industrial Technologies?

    AIT's robust profile makes it a tempting pick for investors seeking exposure to the dynamic industrial sector. Here's what keeps its industrial engine humming:

    • Industrial Supply Titan: AIT boasts a leading position in the North American MRO market, with a vast network of over 600 locations and a comprehensive product offering catering to virtually every industry. This leadership translates to predictable revenue streams and a strong foundation for future growth.
    • Beyond the Bearing: Recognizing the evolving needs of its customers, AIT expands its offerings beyond traditional MRO supplies, venturing into areas like automation solutions, fluid power components, and even specialty flow control solutions. This strategic diversification mitigates risk and unlocks diverse avenues for growth beyond its core business.
    • Technical Expertise: AIT differentiates itself by offering a team of highly trained engineers and technical specialists, providing valuable support and problem-solving expertise to its customers. This focus on value-added services fosters strong relationships and drives repeat business.
    • Global Reach: With operations spanning North America, Europe, and Asia, AIT caters to diverse customer needs across the globe. This international reach positions the company for future growth in emerging markets.

    🐌 Key considerations before investing in Applied Industrial Technologies

    While AIT navigates the industrial labyrinth with its diverse offerings and global reach, there are some potential headwinds to consider before joining this high-stakes journey:

    • Valuation Concerns: Like many industrials, AIT's stock can be volatile, reflecting expectations of future economic conditions, manufacturing activity, and overall market sentiment. A cautious approach with a patient, long-term perspective is wise.
    • Competition Heats Up: Smaller regional players and global industrial giants are vying for market share, challenging AIT's dominant position. Stay informed about industry trends and how AIT plans to maintain its competitive edge.
    • Supply Chain Jitters: Global disruptions and rising shipping costs can impact AIT's inventory management and profitability. Monitoring global trade developments and AIT's adaptation strategies is crucial.
    • Economic Sensitivity: Downturns in industrial activity can significantly impact AIT's sales and profitability. Staying informed about economic trends and their impact on the industrial sector is important.

    Final thoughts on Applied Industrial Technologies

    Applied Industrial Technologies' leadership in MRO supplies, diverse product offerings, technical expertise, and global reach paint a potentially promising picture for long-term investors seeking exposure to the dynamic industrial sector. However, the volatile nature of the stock, rising competition, supply chain challenges, and economic sensitivity warrant a measured approach. Thorough research, analysis of AIT's future plans and the industrial landscape, and a clear understanding of your risk tolerance are crucial before joining this industrial expedition. Remember, navigating the intricate terrain of industrial stocks requires both a discerning eye for market trends and a balanced perspective on potential challenges. Choose wisely, and your portfolio might just find itself running smoothly alongside the success story of Applied Industrial Technologies.

  • Fincantieri (MI:FCT)

    Fincantieri S.p.A. is Italy's leading naval contractor and one of the world's largest shipbuilding companies specializing in advanced military vessels, naval systems, and defense technologies for NATO allies and international defense customers worldwide. Founded in 1959 and headquartered in Trieste, Italy, the company has established itself as a premier provider of sophisticated naval platforms including FREMM frigates, aircraft carriers, and submarines for major navies globally. The company has demonstrated strong performance in securing major naval contracts, particularly benefiting from increased European defense spending and naval modernization programs across allied nations seeking advanced maritime defense capabilities and sophisticated naval technologies.

    The company's defense portfolio encompasses advanced naval vessel construction including FREMM multipurpose frigates, aircraft carriers and amphibious assault ships, patrol vessels and coast guard cutters, and submarine design and manufacturing capabilities. Fincantieri supplies critical naval platforms to major military programs including Italian Navy fleet modernization, NATO allied naval programs, international coast guard operations, and comprehensive naval systems integration used by defense forces worldwide. With rising global naval expenditure and increasing demand for sophisticated maritime defense capabilities, Fincantieri is strategically positioned to capitalize on naval modernization initiatives and the growing need for advanced warships and naval systems in response to evolving maritime security threats.

    Fincantieri financial statements

    Analysts recommendation: 2.2

    Financial Health

    • Return on assets (ROA): 3.8%
    • Return on equity (ROE): 9.4%
    • Return on investment (ROI): 5.6%

    Profitability

    • Gross margin: 14.2%
    • Operating margin: 6.8%
    • Net profit margin: 3.9%

    Growth

    • EPS (past 5 years): 18.3%
    • EPS (current): 0.42
    • EPS estimate (next quarter): 0.48
    • EPS growth (this year): 28.4%
    • EPS growth (next year): 22.7%
    • EPS growth (next 5 years): 15.8%
    • EPS growth (quarter-over-quarter): 31.2%
    • Sales growth (past 5 years): 12.4%
    • Sales growth (quarter-over-quarter): 18.9%

    💡 Why invest in Fincantieri?

    Like advanced naval vessels that project power across strategic waterways, Fincantieri demonstrates compelling strengths for defense-focused investors seeking European naval technology exposure.

    • Global Naval Shipbuilding Leadership: Fincantieri ranks among the world's largest naval contractors with dominant positions in frigate construction, aircraft carrier design, and submarine manufacturing, creating substantial barriers to entry.
    • Advanced Naval Technology Integration: Develops cutting-edge naval platforms including FREMM frigates and aircraft carriers that incorporate sophisticated combat systems, sensors, and propulsion technologies commanding premium pricing globally.
    • NATO Alliance Naval Programs: Benefits from NATO naval modernization initiatives and allied fleet replacement programs, creating long-term revenue streams from multi-billion euro contracts with predictable delivery schedules.
    • Comprehensive Naval Solutions Provider: Offers integrated naval capabilities from initial design and construction through lifecycle support, maintenance, and modernization services, generating recurring revenue streams.

    🐌 Key considerations before investing in Fincantieri

    However, like navigating complex naval operations where technical failures can compromise mission effectiveness, Fincantieri faces significant challenges that defense investors must evaluate.

    • Naval Program Execution Complexity: Complex multi-year shipbuilding projects face significant technical, schedule, and cost risks that can result in financial penalties, reduced margins, and delayed revenue recognition.
    • Defense Budget Dependency: Heavy reliance on government naval procurement budgets makes the company vulnerable to defense spending cuts, political changes, and shifts in military priorities affecting order books.
    • Competitive Global Naval Market: Faces intense competition from established naval contractors like BAE Systems, Huntington Ingalls, and Naval Group with superior resources and established customer relationships.
    • Geopolitical Export Restrictions: International naval contracts subject to complex export controls, technology transfer requirements, and political considerations that can delay or complicate project execution.

    Final thoughts on Fincantieri

    Fincantieri's global naval shipbuilding leadership, advanced technology integration, NATO alliance positioning, and comprehensive solutions capability create compelling opportunities for investors seeking exposure to the Italian defense and naval sectors. However, program execution complexity, defense budget dependency, competitive pressures, and export restrictions warrant careful evaluation of specialized naval industry dynamics. Like a sophisticated naval command center coordinating complex fleet operations across multiple theaters, Fincantieri combines engineering excellence with strategic positioning to deliver mission-critical naval platforms while navigating the complex landscape of European naval modernization and global maritime security challenges.

  • Prysmian (MI:PRY)

    Prysmian Group S.p.A. is Italy's leading cable manufacturer and one of the world's largest providers of cables and systems for energy, telecommunications, and defense infrastructure applications worldwide. Founded in 1879 and headquartered in Milan, Italy, the company has evolved into a comprehensive infrastructure solutions provider with cutting-edge capabilities in submarine cables, secure communications, and mission-critical defense connectivity. The company has demonstrated strong growth in defense-related projects, particularly benefiting from increased NATO infrastructure spending and military modernization programs across allied nations seeking advanced communication systems and secure connectivity solutions.

    The company's defense portfolio encompasses secure communication cables for military installations, submarine cables for naval communications and surveillance systems, specialized cables for defense facilities and command centers, and ruggedized fiber optic systems for battlefield communications. Prysmian supplies critical infrastructure to major defense programs including NATO communication networks, military base connectivity, naval facility installations, and secure government communication systems used by defense forces worldwide. With rising global defense expenditure and increasing demand for secure communication infrastructure, Prysmian is strategically positioned to capitalize on defense modernization initiatives and the growing need for reliable, secure connectivity solutions in response to evolving cybersecurity threats.

    Prysmian financial statements

    Analysts recommendation: 2

    Financial Health

    • Return on assets (ROA): 4.8%
    • Return on equity (ROE): 11.2%
    • Return on investment (ROI): 7.3%

    Profitability

    • Gross margin: 22.1%
    • Operating margin: 9.8%
    • Net profit margin: 6.4%

    Growth

    • EPS (past 5 years): 12.8%
    • EPS (current): 2.85
    • EPS estimate (next quarter): 3.1
    • EPS growth (this year): 18.7%
    • EPS growth (next year): 15.3%
    • EPS growth (next 5 years): 14.2%
    • EPS growth (quarter-over-quarter): 16.9%
    • Sales growth (past 5 years): 8.9%
    • Sales growth (quarter-over-quarter): 11.4%

    💡 Why invest in Prysmian?

    Like secure fiber optic networks that enable critical communications across vast operational theaters, Prysmian demonstrates compelling strengths for defense-focused investors seeking infrastructure exposure.

    • Critical Defense Infrastructure: Prysmian provides essential cable and connectivity solutions for military installations, command centers, and secure communication networks that are fundamental to defense operations and national security worldwide.
    • Submarine Cable Technology Dominance: Maintains global leadership in submarine cable systems including specialized military applications for secure underwater communications, naval surveillance networks, and strategic defense connectivity solutions.
    • NATO Alliance Infrastructure Provider: Serves defense customers across NATO allies and partner nations, benefiting from coordinated defense infrastructure investments, standardization initiatives, and multi-year military modernization programs.
    • Advanced Defense Communication: Develops cutting-edge cable technologies including cybersecure cables, ruggedized fiber optic systems, and high-speed military communications that command premium pricing and create competitive differentiation.

    🐌 Key considerations before investing in Prysmian

    However, like laying cables through contested territory where multiple threats can disrupt operations, Prysmian faces significant challenges that defense investors must evaluate.

    • Defense Budget Dependency: Defense-related revenue subject to government spending cycles, budget constraints, and changing military priorities that can impact project timing, contract values, and revenue stability.
    • Complex Project Execution Risks: Defense cable projects involve complex engineering challenges, harsh operating environments, and strict security requirements that create execution risks and potential cost overruns.
    • Technology Disruption Threats: Defense communications sector faces potential disruption from wireless technologies, satellite communications, and alternative connectivity solutions that could reduce traditional cable demand.
    • Geopolitical and Security Compliance: Defense projects involve sensitive locations and classified information, creating exposure to geopolitical tensions, security threats, and regulatory restrictions affecting operations.

    Final thoughts on Prysmian

    Prysmian's critical defense infrastructure leadership, submarine cable dominance, NATO alliance positioning, and advanced communication systems create compelling opportunities for investors seeking exposure to essential defense connectivity solutions. However, defense budget dependency, project execution complexity, technology disruption risks, and geopolitical challenges warrant careful evaluation of specialized defense infrastructure dynamics. Like resilient communication networks that maintain connectivity under challenging conditions, Prysmian combines technical excellence with strategic positioning to deliver mission-critical infrastructure enabling modern defense operations and secure communications worldwide.

  • Advanced Drainage Systems (WMS)

    Advanced Drainage Systems, Inc. (ADS) is a leading provider of innovative water management solutions, specializing in stormwater and wastewater drainage products. Founded in 1966 and headquartered in Hilliard, Ohio, the company has grown into one of the largest manufacturers of thermoplastic pipes, basins, and other infrastructure components. With a strong presence across North America and international markets, ADS serves a wide range of industries, including construction, agriculture, and municipal water management.

    The company's core business focuses on engineering sustainable drainage solutions that improve water flow, reduce environmental impact, and enhance infrastructure durability. ADS is known for its high-performance corrugated pipes and geosynthetic products, which offer cost-effective and long-lasting alternatives to traditional materials. By prioritizing innovation, sustainability, and customer service, Advanced Drainage Systems continues to drive advancements in water management technology and expand its influence in the global infrastructure sector.

    Advanced Drainage Systems financial statements

    Analysts recommendation: 1.44

    Financial Health

    • Return on assets (ROA): 12.75%
    • Return on equity (ROE): 31.26%
    • Return on investment (ROI): 14.76%

    Profitability

    • Gross margin: 35.87%
    • Operating margin: 22.56%
    • Net profit margin: 15.5%

    Growth

    • EPS (past 5 years): N/A
    • EPS (current): 5.76
    • EPS estimate (next quarter): 1.76
    • EPS growth (this year): -4.55%
    • EPS growth (next year): 11.93%
    • EPS growth (next 5 years): 6.48%
    • EPS growth (quarter-over-quarter): -18.24%
    • Sales growth (past 5 years): 11.65%
    • Sales growth (quarter-over-quarter): -5.82%

    💡 Why invest in Advanced Drainage Systems?

    Advanced Drainage Systems offers several potential advantages for investors seeking exposure to the construction and environmental sectors:

    • Essential Infrastructure: WMS provides critical infrastructure solutions for managing water runoff and preventing flooding, making their products essential for communities and businesses.
    • Diversified Product Offering: With a wide range of products, WMS caters to various market segments, reducing reliance on any single product category.
    • Growth Potential: Increasing urbanization, infrastructure development, and climate change-related challenges create growth opportunities for water management solutions.
    • Market Leadership: As the largest manufacturer of high-density polyethylene pipe in the United States, WMS enjoys a strong market position.

    🐌 Key considerations before investing in Advanced Drainage Systems

    However, before investing in Advanced Drainage Systems, it's crucial to consider these potential challenges:

    • Economic Sensitivity: The construction and infrastructure industries can be cyclical, impacting demand for WMS products.
    • Commodity Prices: The cost of raw materials, such as plastic resins, can fluctuate, affecting profitability.
    • Competition: The water management solutions market is competitive, with both established players and new entrants vying for market share.
    • Regulatory Environment: Environmental regulations and building codes can impact product design and costs.

    Final thoughts on Advanced Drainage Systems

    Advanced Drainage Systems' focus on essential infrastructure, diversified product offering, and growth potential make it an attractive investment for those seeking exposure to the construction and environmental sectors. However, the cyclical nature of the construction industry, commodity price fluctuations, competition, and regulatory environment necessitate careful consideration. Thorough research on WMS's product innovation, market expansion plans, and financial performance is crucial before investing.

  • Lisi Group (PA:FII)

    Lisi Group is France's leading precision fastener and structural component manufacturer specializing in high-performance solutions for aerospace, defense, and automotive applications worldwide. Founded in 1777 and headquartered in Belfort, France, the company has established itself as a premier supplier of critical components for military aircraft, defense systems, and aerospace platforms used by NATO allies and international defense customers globally. The company has demonstrated strong performance in defense contracts, particularly benefiting from increased European defense spending and military modernization programs across allied nations seeking advanced fastening solutions and sophisticated structural components.

    The company's defense portfolio encompasses high-strength fasteners for military aircraft structures, specialized components for defense systems and weapons platforms, precision-engineered parts for aerospace applications, and critical assembly solutions for military vehicles and equipment. Lisi supplies essential components to major defense programs including military aircraft manufacturing, NATO defense platforms, aerospace contractor supply chains, and specialized fastening systems used by defense forces worldwide. With rising global defense expenditure and increasing demand for advanced military platforms, Lisi is strategically positioned to capitalize on defense modernization initiatives and the growing need for high-performance components ensuring reliability and safety of critical defense systems.

    Lisi Group financial statements

    Analysts recommendation: 2.4

    Financial Health

    • Return on assets (ROA): 4.2%
    • Return on equity (ROE): 11.8%
    • Return on investment (ROI): 6.9%

    Profitability

    • Gross margin: 28.4%
    • Operating margin: 8.7%
    • Net profit margin: 5.8%

    Growth

    • EPS (past 5 years): 12.4%
    • EPS (current): 3.85
    • EPS estimate (next quarter): 4.2
    • EPS growth (this year): 24.8%
    • EPS growth (next year): 18.6%
    • EPS growth (next 5 years): 14.7%
    • EPS growth (quarter-over-quarter): 22.3%
    • Sales growth (past 5 years): 8.9%
    • Sales growth (quarter-over-quarter): 16.8%

    💡 Why invest in Lisi Group?

    Like precision-engineered fasteners that hold critical components together under extreme operational stress, Lisi demonstrates compelling strengths for defense-focused investors seeking specialized manufacturing exposure.

    • Critical Defense Component Leadership: Lisi provides essential fasteners and structural components for military aircraft and defense systems where failure is not an option, creating substantial barriers to entry and long-term revenue streams.
    • Aerospace Manufacturing Excellence: Leverages advanced manufacturing capabilities and precision engineering to produce high-performance components meeting stringent aerospace and defense quality requirements with premium pricing power.
    • Defense Platform Integration: Components deeply integrated into major military aircraft programs including fighter jets and transport aircraft, providing decades of aftermarket revenue through spare parts and maintenance support.
    • Global Defense Modernization Beneficiary: Benefits from increasing global defense spending and military modernization programs requiring advanced components and fastening solutions for next-generation defense platforms worldwide.

    🐌 Key considerations before investing in Lisi Group

    However, like operating precision manufacturing under demanding schedules where quality cannot be compromised, Lisi faces significant challenges that defense investors must assess.

    • Defense Procurement Cycle Dependency: Defense business subject to military procurement cycles, program delays, and changing priorities that can create volatility in order timing, production volumes, and revenue stability.
    • Manufacturing Cost and Quality Pressures: Faces ongoing pressure to reduce costs while maintaining highest quality standards required for aerospace applications, creating margin pressure and requiring continuous efficiency investments.
    • Competitive Component Manufacturing Market: Faces competition from established aerospace component manufacturers with significant scale and customer relationships, requiring continuous investment in capabilities while pressuring margins.
    • Supply Chain and Quality Control Risks: Defense component manufacturing requires complex supply chains and stringent quality processes where failures can result in financial penalties and reputational damage.

    Final thoughts on Lisi Group

    Lisi's critical defense component leadership, aerospace manufacturing excellence, defense platform integration, and global modernization positioning create compelling opportunities for investors seeking exposure to the French defense manufacturing sector. However, procurement cycle dependency, cost pressures, competitive challenges, and quality risks warrant careful evaluation of specialized defense manufacturing dynamics. Like precision-engineered fasteners providing structural integrity across demanding operational conditions, Lisi combines manufacturing excellence with strategic positioning to deliver mission-critical components while navigating the complex landscape of defense modernization and aerospace manufacturing advancement.

  • AAON (AAON)

    AAON is a leading manufacturer of high-performance HVAC (heating, ventilation, and air conditioning) equipment, specializing in energy-efficient solutions for commercial and industrial applications. The company was founded in 1988 and is headquartered in Tulsa, Oklahoma. Over the years, AAON has built a reputation for innovation, quality, and sustainability in the HVAC industry.

    AAON's core business revolves around designing and producing customizable HVAC systems, including rooftop units, chillers, air handlers, and heat pumps. The company differentiates itself through advanced engineering, modular designs, and a focus on energy efficiency, helping businesses reduce operational costs while maintaining optimal climate control. With a strong commitment to research and development, AAON continues to expand its product offerings to meet the evolving needs of the commercial HVAC market.

    AAON financial statements

    Analysts recommendation: 1.71

    Financial Health

    • Return on assets (ROA): 14.1%
    • Return on equity (ROE): 19.85%
    • Return on investment (ROI): 14.69%

    Profitability

    • Gross margin: 29.17%
    • Operating margin: 15.64%
    • Net profit margin: 12.6%

    Growth

    • EPS (past 5 years): 24.26%
    • EPS (current): 1.9
    • EPS estimate (next quarter): 0.37
    • EPS growth (this year): 3.63%
    • EPS growth (next year): 31.08%
    • EPS growth (next 5 years): 20.11%
    • EPS growth (quarter-over-quarter): -24.3%
    • Sales growth (past 5 years): 20.67%
    • Sales growth (quarter-over-quarter): 22.87%

    💡 Why invest in AAON?

    AAON Inc. offers several potential advantages for investors seeking exposure to the construction and industrial sectors:

    • Essential Products: HVAC systems are critical for the comfort and efficiency of various buildings and facilities, making AAON's products essential for many industries.
    • Customizable Solutions: AAON's ability to design and manufacture customized units aligns with the diverse needs of different applications.
    • Growing Demand: Increasing urbanization and the need for climate-controlled environments in various sectors drive demand for HVAC equipment.
    • Focus on Efficiency: AAON emphasizes energy-efficient solutions, aligning with the growing focus on sustainability.

    🐌 Key considerations before investing in AAON

    However, before investing in AAON, it's crucial to consider these potential challenges:

    • Economic Sensitivity: The construction and industrial sectors, which are major customers for HVAC equipment, can be cyclical and impacted by economic downturns.
    • Competition: The HVAC industry is competitive, with both established players and new entrants vying for market share.
    • Commodity Prices: Fluctuations in the price of raw materials used in HVAC equipment can impact profitability.
    • Regulatory Environment: Energy efficiency standards and building codes can influence product design and demand.

    Final thoughts on AAON

    AAON's focus on essential HVAC solutions, customizable products, and growing market demand make it an attractive investment for those seeking exposure to the construction and industrial sectors. However, economic sensitivity, competition, commodity prices, and regulatory factors necessitate careful consideration. Thorough research on AAON's product pipeline, market expansion plans, and financial performance is crucial before investing.

  • Graphic Packaging (GPK)

    Graphic Packaging is a leading provider of paper-based packaging solutions, headquartered in Atlanta, Georgia. Founded in 2007, the company has grown to become one of the largest producers of consumer packaging in North America, serving industries such as food and beverage, personal care, and healthcare. Graphic Packaging operates a diverse portfolio of brands and products, with facilities across North America, South America, and Europe.

    The company specializes in the design, manufacturing, and distribution of paperboard and packaging solutions, offering sustainable alternatives to plastic packaging. Its products include cartons, trays, and folding cartons, which are used by major consumer goods companies to package a wide range of products. Committed to sustainability, innovation, and customer satisfaction, Graphic Packaging continues to lead the way in providing eco-friendly packaging solutions that meet the evolving needs of the marketplace.

    Graphic Packaging financial statements

    Analysts recommendation: 2.14

    Financial Health

    • Return on assets (ROA): 5.43%
    • Return on equity (ROE): 20.62%
    • Return on investment (ROI): 7.02%

    Profitability

    • Gross margin: 21.95%
    • Operating margin: 12.47%
    • Net profit margin: 7.15%

    Growth

    • EPS (past 5 years): 25.19%
    • EPS (current): 2.04
    • EPS estimate (next quarter): 0.45
    • EPS growth (this year): -17.41%
    • EPS growth (next year): 19.29%
    • EPS growth (next 5 years): 3.14%
    • EPS growth (quarter-over-quarter): -21.28%
    • Sales growth (past 5 years): 7.41%
    • Sales growth (quarter-over-quarter): -6.15%

    💡 Why invest in Graphic Packaging?

    Graphic Packaging offers several potential advantages for investors seeking exposure to the consumer goods industry:

    • Essential Products: Packaging is a fundamental component of the consumer goods supply chain, making Graphic Packaging's products essential for various industries.
    • Diversified Customer Base: The company serves a broad range of consumer product companies, reducing reliance on any single industry.
    • Focus on Sustainability: Graphic Packaging is committed to sustainable packaging solutions, aligning with growing consumer and regulatory interest in environmental responsibility.
    • Growth Potential: Increasing consumer spending and the shift towards sustainable packaging present growth opportunities for the company.

    🐌 Key considerations before investing in Graphic Packaging

    However, before investing in Graphic Packaging, it's crucial to consider these potential challenges:

    • Commodity Price Risk: Fluctuations in the price of paper and other raw materials can impact profitability.
    • Competition: The packaging industry is competitive, with both established players and new entrants vying for market share.
    • Economic Sensitivity: Consumer spending patterns can be influenced by economic conditions, impacting demand for packaging products.
    • Regulatory Environment: Environmental regulations and packaging standards can impact product design and costs.

    Final thoughts on Graphic Packaging

    Graphic Packaging Holding Company's focus on essential packaging solutions, diversified customer base, and commitment to sustainability make it an attractive investment for those seeking exposure to the consumer goods industry. However, commodity price fluctuations, competition, economic conditions, and regulatory factors necessitate careful consideration. Thorough research on Graphic Packaging's product innovation, market expansion plans, and financial performance is crucial before investing.

  • H.B. Fuller Company (FUL)

    H.B. Fuller Company is a global leader in the production of adhesives, sealants, and other specialty chemicals, headquartered in St. Paul, Minnesota. Founded in 1887, the company has a long history of providing high-performance solutions to a wide range of industries, including automotive, electronics, packaging, and construction. With operations in more than 40 countries, H.B. Fuller serves customers across diverse markets, offering innovative products that improve performance and efficiency.

    The company specializes in developing adhesives and other bonding solutions that are used in various industrial and consumer applications. H.B. Fuller's products include adhesives for packaging, automotive assembly, construction, and electronics, among others. Committed to sustainability and technological advancement, H.B. Fuller continues to drive growth by providing solutions that meet the ever-changing needs of its global customer base.

    H.B. Fuller Company financial statements

    Analysts recommendation: 2.83

    Financial Health

    • Return on assets (ROA): 2.33%
    • Return on equity (ROE): 6.35%
    • Return on investment (ROI): 2.84%

    Profitability

    • Gross margin: 29.94%
    • Operating margin: 9.83%
    • Net profit margin: 3.17%

    Growth

    • EPS (past 5 years): -1.78%
    • EPS (current): 1.99
    • EPS estimate (next quarter): 1.08
    • EPS growth (this year): 6.18%
    • EPS growth (next year): 13.38%
    • EPS growth (next 5 years): 12.72%
    • EPS growth (quarter-over-quarter): -56.85%
    • Sales growth (past 5 years): 4.26%
    • Sales growth (quarter-over-quarter): -2.68%

    💡 Why invest in H.B. Fuller Company?

    H.B. Fuller offers several potential advantages for investors seeking exposure to the industrial and manufacturing sectors:

    • Essential Products: Adhesives and sealants are fundamental components in numerous industries, making H.B. Fuller's products essential for various applications.
    • Diversified Customer Base: The company serves a wide range of industries, reducing reliance on any single sector.
    • Focus on Innovation: H.B. Fuller invests in research and development to create innovative and sustainable adhesives and sealants.
    • Global Reach: Operating in multiple countries, H.B. Fuller can capitalize on growth opportunities in various regions.

    🐌 Key considerations before investing in H.B. Fuller Company

    However, before investing in H.B. Fuller, it's crucial to consider these potential challenges:

    • Economic Sensitivity: The construction, packaging, and industrial sectors can be cyclical, impacting demand for adhesives and sealants.
    • Raw Material Costs: Fluctuations in the price of raw materials used in adhesives can impact profitability.
    • Competition: The adhesives and sealants market is competitive, with both established players and new entrants vying for market share.
    • Regulatory Environment: Environmental regulations and safety standards can influence product design and costs.

    Final thoughts on H.B. Fuller Company

    H.B. Fuller's focus on essential adhesives and sealants, diversified customer base, and commitment to innovation make it an attractive investment for those seeking exposure to the industrial and manufacturing sectors. However, economic sensitivity, raw material costs, competition, and regulatory factors necessitate careful consideration. Thorough research on H.B. Fuller's product pipeline, market expansion plans, and financial performance is crucial before investing.

  • Serco Group (L:SRP)

    Serco Group plc is a British multinational defense and government services contractor that provides critical support to military and defense organizations worldwide. Founded in 1929 and headquartered in Hook, Hampshire, the company has evolved into one of the world's leading defense contractors, supporting NATO allies and partner nations across multiple continents. The company has demonstrated strong performance in securing major defense contracts, including multi-billion pound agreements for military training, base operations, and defense technology support services.

    The company's defense operations encompass military training and simulation, base and facility management, equipment maintenance and logistics, air traffic control for military installations, and specialized defense technology services. Serco supports critical defense infrastructure including naval bases, air force installations, army training facilities, and defense research establishments across the UK, US, Australia, and other allied nations. With growing global defense spending and increasing demand for outsourced military support services, Serco is well-positioned to capitalize on the expanding defense services market while maintaining its reputation as a trusted partner to defense organizations worldwide.

    Serco Group financial statements

    Analysts recommendation: 2.1

    Financial Health

    • Return on assets (ROA): 4.8%
    • Return on equity (ROE): 18.2%
    • Return on investment (ROI): 8.4%

    Profitability

    • Gross margin: 12.5%
    • Operating margin: 4.2%
    • Net profit margin: 2.8%

    Growth

    • EPS (past 5 years): 15.2%
    • EPS (current): 0.12
    • EPS estimate (next quarter): 0.14
    • EPS growth (this year): 25.4%
    • EPS growth (next year): 18.7%
    • EPS growth (next 5 years): 12.8%
    • EPS growth (quarter-over-quarter): 22.1%
    • Sales growth (past 5 years): 8.3%
    • Sales growth (quarter-over-quarter): 6.7%

    💡 Why invest in Serco Group?

    Like a strategic fortress that provides essential support to allied forces, Serco Group demonstrates compelling strengths that make it attractive in the expanding defense services sector.

    • Long-Term Defense Contracts: Serco holds multi-year defense contracts spanning 10-20 years with NATO allies, providing predictable revenue streams and exceptional visibility into future cash flows with built-in escalation clauses.
    • Allied Nation Network: Operations across UK, US, Australia, and Canada within Five Eyes alliance and NATO framework provide access to classified contracts and reduce geopolitical concentration risk through diversified revenue.
    • Mission-Critical Services: Provides essential defense support including base operations, pilot training, and equipment maintenance that military organizations cannot easily eliminate, ensuring continued demand during budget constraints.
    • Defense Technology Integration: Capitalizes on military modernization by integrating AI, cybersecurity, and digital simulation into defense training, creating opportunities for higher-margin contracts and expanded service offerings.

    🐌 Key considerations before investing in Serco Group

    However, like operating in contested territory where threats emerge from multiple directions, Serco Group faces significant challenges that defense investors must carefully assess.

    • Defense Budget Dependency: Heavy reliance on defense spending makes the company vulnerable to military budget cuts and political pressure to reduce outsourcing, threatening existing contracts and limiting growth opportunities.
    • Security Clearance Requirements: Defense operations require extensive security clearances and strict compliance, creating vulnerabilities to security breaches or clearance revocations that could result in contract terminations.
    • Competitive Defense Market: Faces intense competition from established contractors like BAE Systems and General Dynamics with superior resources and established relationships that can challenge market position.
    • Operational Execution Risk: Mission-critical defense operations where performance failures can impact military readiness, potentially resulting in contract penalties, terminations, and reputational damage.

    Final thoughts on Serco Group

    Serco Group's extensive defense contract portfolio, strategic positioning within allied defense networks, and mission-critical service capabilities create compelling opportunities for investors seeking exposure to the growing global defense services market. However, the company's dependence on defense budgets, security clearance requirements, competitive pressures, and operational execution risks require careful evaluation of the inherent challenges in defense contracting. Like a trusted quartermaster who ensures military forces have the essential support they need to succeed, Serco combines operational expertise with strategic positioning to deliver reliable value in the expanding defense outsourcing sector.

If you are interested in other stock categories, check out my other lists of the best mid-cap semiconductor, utility, basic materials, energy, industrial, retail, healthcare, financial, tech stocks.