The Best Industrials Stocks to Buy

Industrials stocks are essential for economic growth, covering diverse businesses from manufacturing to transportation. This sector tends to thrive during economic expansions and can benefit from increased government spending on infrastructure projects.

In the year to date, the Morningstar US Industrials Index rose 17.62%, while the Morningstar US Market Index gained 17.27%.

The 12 Best Industrials Stocks to Buy Now

These were the most undervalued industrials stocks that Morningstar’s analysts cover as of Nov. 12, 2025.

1. CNH Industrial CNH
2. Global Payments GPN
3. Terex TEX
4. Masco MAS
5. Oshkosh OSK
6. BAE Systems BAESY
7. PACCAR PCAR
8. Equifax EFX
9. Copart CPRT
10. Boeing BA
11. RELX RELX
12. IDEX IEX

To come up with our list of the best industrials stocks to buy now, we screened for:

• Industrials stocks that are undervalued, as measured by our price/fair value metric.
• Stocks that earn narrow or wide Morningstar Economic Moat Ratings. We think companies with narrow economic moat ratings can fight off competitors for at least 10 years; wide-moat companies should remain competitive for 20 years or more.
• Stocks that earn a Low, Medium, High, or Very High Morningstar Uncertainty Rating, which captures the range of potential outcomes for a company’s fair value.

Here’s a little more about each of the best industrials stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of Nov. 12, 2025.

CNH Industrial

• Morningstar Price/Fair Value: 0.52
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 2.42%
• Industry: Farm & Heavy Construction Machinery

Heavy machinery company CNH Industrial is the cheapest stock on our list of the best industrials stocks to buy. CNH Industrial is the world’s second-largest manufacturer of agricultural machinery (82% of industrial net sales) as well as a major player in construction equipment (18% of industrial net sales). The stock is trading 48% below our fair value estimate of $20 per share.

CNH Industrial has a somewhat complicated history dating back to 2013 when the legacy Case New Holland business was combined with the nonautomotive activities of Italy’s Fiat Group to form CNH Industrial. After the pandemic, CNH’s management decided to further separate the company’s off-road and on-road assets. This resulted in the 2022 demerger of Iveco Group, which represented the remaining “on-road” commercial vehicle and powertrain assets. Remaining CNH Industrial is now focused on its agriculture business (74% of sales) with construction (16%) and the captive finance subsidiary (10%).

The agriculture business is the number-two global player and is organized very similarly to the top global competitor, Deere. Both firms have long histories and have cultivated iconic brands for industrializing agriculture around the world. This has resulted in a large, loyal installed base of products and customers. Both firms maintain independent dealer networks with thousands of points of sale and global reach. They also operate captive finance subsidiaries to bundle financing, enhancing their value proposition. CNH’s construction business provides some diversification and countercyclicality as do the related businesses at Deere, though CNH’s inferior scale is more dilutive. The next strategic chapter is the advent of “precision agriculture,” meaning the incorporation of various digital technologies into agricultural equipment to enhance crop yields and drive other efficiencies. Incorporating these advanced technologies into its products and working closely with its network of customers ideally sets CNH up in a virtual circle of margin-accretive innovation in a growing global market.

As a result, we would characterize CNH’s business strategy as “fast follower.” Its lower market share and weaker balance sheet have resulted in returns inferior to Deere’s. Moreover, this has forced CNH to acquire various capabilities as opposed to organic development. However, we believe CNH offers a comparable portfolio of products with a dealer network and finance subsidiary all at scale. While it lags Deere, the rising tide of precision agriculture will inevitably lift all ships.

Read more about CNH Industrial here.

Global Payments

• Morningstar Price/Fair Value: 0.59
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 1.29%
• Industry: Specialty Business Services

Global Payments is a leading provider of payment processing and software solutions and focuses on serving small and midsize merchants. The firm earns a narrow economic moat rating, and the shares of its stock look 41% undervalued relative to our $131 fair value estimate.

We believe the market is overly concerned about disruption to incumbent payment players like Global Payments. In our view, Global Payments continues to benefit from a strong competitive position, is adapting to a changing industry, and can maintain reasonable growth over time. While peer Worldpay struggled under FIS’ roof, we think that was due to underinvestment.

Through the pandemic, Global Payments did feel the pinch from the coronavirus pandemic as payment transactions fell markedly. Given its focus on small merchants, we think Global Payments held up fairly well; results following the pandemic suggest the long-term shift to electronic payments has reasserted itself, and volumes have recovered fairly quickly. As such, we think Global Payments can maintain the solid growth it has enjoyed historically, assuming a stable economy. However, Global Payments’ focus on small merchants leaves it relatively exposed if we do go into a recession.

Global Payments recently announced it intends to acquire Worldpay. It will purchase FIS’ Worldpay minority stake by giving FIS its issuer processing business and will pay for GTCR’s majority stake with cash and shares. This deal will largely undo the TSYS merger in 2019, will focus Global Payments completely on its acquiring operations, and dramatically expand its acquiring volume from about $1 trillion to about $4 trillion.

Given that we see scale-based cost advantages as the key driver of economic moats in acquiring, we think this deal could materially strengthen the company’s moat in the long term. Additionally, it could give the company a leg up in realizing international expansion opportunities. However, this deal carries significant execution risk, pushes Global Payments into the large merchant space where it has little experience, and leaves it leveraged to the turnaround efforts underway at Worldpay. In short, we see this as big-risk, big-reward move. We see this risk as potentially magnified given current macroeconomic uncertainty.

Read more about Global Payments here.

Terex

• Morningstar Price/Fair Value: 0.60
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 1.48%
• Industry: Farm & Heavy Construction Machinery

Next on our list of the best industrials stocks to buy is Terex. Terex is a global manufacturer of aerial work platforms, materials processing equipment, and specialty equipment for the waste, recycling, and utility industries. The stock is trading at a 40% discount to our fair value estimate of $77 per share.

Terex is a niche manufacturer of small and medium-size machines and other vocational vehicles that aid its customers in conducting various forms of work across construction sites, factories, quarries, infrastructure sites, and municipalities. The company has leading market shares in most of its categories owing to a strong portfolio of brands and highly engineered products. Historically, its Genie aerial work platform business has been the strongest performer, though also the most cyclical given its end market exposures (largely construction and other job sites). The material processing segment provides various mobile crushing and screening machinery used at quarries and in infrastructure and construction. Because of the high operating intensity of these products, Terex realizes somewhat higher operating margins from spares and repairs. More recently, Terex added its environmental solutions group after acquiring a nearly $1 billion refuse and recycling vehicle business from Dover Corporation, which it combined with certain utility truck assets. This business offers customers significant customization and also has the highest operating margins in the group.

In the 2000s under different management, Terex was far more acquisitive and tried to pursue a strategy of emulating heavy machinery peers like Caterpillar and Deere, but focused on smaller, niche equipment. Specifically, Terex had significant assets in mobile cranes, lifting equipment, and port handling solutions. The company has exited most of these businesses, which were subscale and struggled to generate healthy returns. As such, Terex maintains a much more focused portfolio today where it has at least a top-three market position in all its product categories. Cash flow generation and financial returns have improved, and management has improved shareholder remuneration. In furtherance of this strategy, Terex recently announced its intention to merge with REV Group, a provider of specialty vehicles (fire trucks, ambulances, and related emergency equipment) and recreational vehicles. Terex will likely exit its more cyclical aerials business in order to focus on categories with more resilient demand.

Read more about Terex here.

Masco

• Morningstar Price/Fair Value: 0.73
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Forward Dividend Yield: 1.98%
• Industry: Building Products & Equipment

Masco manufactures a variety of home improvement and building products. Masco is an affordable industrials stock, trading at a 27% discount to our fair value estimate of $86 per share. The building products and equipment firm earns a wide economic moat rating.

Masco almost entirely refreshed its senior executive management team in 2014. Since then, it has taken significant measures to build a stronger and more consistent business model. The firm divested its most cyclical and least profitable businesses (it spun off its installation business, now named TopBuild, to shareholders in 2015 and sold its windows and cabinetry businesses in 2019 and 2020, respectively). Management also executed significant cost-reduction initiatives and shored up the firm’s balance sheet.

In our view, Masco’s sale of its windows and cabinetry businesses was a positive development for the firm because we had long viewed its plumbing and decorative architectural businesses as the firm’s crown jewels and key drivers of the company’s valuation, while Masco’s cabinetry and windows businesses were often laggards that had been a drag on margins and returns on invested capital.

Repair and remodel spending and, to a much lesser extent, new residential construction are major drivers of Masco’s financial performance. After divesting its installation, windows, and cabinetry businesses, the firm’s overall exposure to the R&R market is 88% of sales.

R&R spending surged during the pandemic but softened in 2023 and 2024. Owing to reduced consumer confidence amid uncertain US trade policy and the specter of a recession, we project flat R&R spending in 2025. We see fewer home improvement projects being offset by higher prices for building products. Nevertheless, we continue to see a mid-single-digit percentage long-term growth trajectory for R&R spending. We expect the repair and remodel market will benefit from several long-term secular tailwinds relating to aging housing stock and increased acceptance of smart home and energy-efficient products and solutions.

Once the US consumer gains confidence under more certain trade policy and healthy economic conditions, we forecast Masco will consistently deliver mid-single-digit percentage revenue growth and high-teens operating margin.

Read more about Masco here.

Oshkosh

• Morningstar Price/Fair Value: 0.77
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 1.63%
• Industry: Farm & Heavy Construction Machinery

Oshkosh is a leading maker of access equipment, specialty vehicles, and military trucks. Oshkosh is an affordable industrials stock, trading at a 23% discount to our fair value estimate of $163 per share. The heavy machinery company earns a narrow economic moat rating.

Oshkosh is a leading designer and manufacturer of niche small and medium-size machines and other vocational vehicles that aid its customers in conducting various forms of work across construction sites, factories, airports, and municipalities. The company holds leading market shares in most of its categories, thanks to a strong portfolio of brands and highly engineered products. Historically, its market-leading JLG aerial work platform business (the “Access” segment) has been the strongest performer, though also the most cyclical given its end market exposures (largely construction and other job sites). The Vocational and recently rebranded Transport segments are focused more on municipal and government customers and have historically had more resilient demand.

Regardless, the group has generated solid cash flows, allowing for a virtuous circle of organic investment, opportunistic acquisitions, and improved shareholder remuneration through share repurchases and dividends. In recent years, the company has made efforts to improve its supply chains and eliminate excess costs from the business, particularly in the Access segment. This has improved operating margins and cash flow. The company has also been opportunistically acquisitive to expand into adjacent niches of highly engineered equipment, machinery, and vehicles serving mission-critical functions. A notable recent example is the company’s nearly $1 billion acquisition of AeroTech from JBT Corporation in 2023. AeroTech is a leading supplier of ground support products, gate equipment, and related services to airports and other aviation-related customers.

Overall, Oshkosh’s portfolio is the beneficiary of megatrends around infrastructure, municipal modernization, air traffic growth, and the increasing connectedness of these technologies (autonomy, electrification, and so forth). Management is thus trying to drive GDP-plus growth rates.

Read more about Oshkosh here.

BAE Systems

• Morningstar Price/Fair Value: 0.78
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Forward Dividend Yield: 1.95%
• Industry: Aerospace & Defense

BAE Systems is a British global defense, security, and aerospace company and the largest defense contractor in Europe; it is one of six prime contractors to the US Department of Defense. Trading 22% below our fair value estimate, BAE Systems has an economic moat rating of wide. We think shares of this stock are worth $121 per share.

Escalating global security concerns, intensified by the war in Ukraine, are driving structurally higher growth in the defense market. We anticipate this growth will be uninterrupted for at least several years, considering that many countries, particularly in Europe, have underspent since the end of the Cold War. BAE Systems is strategically positioned to benefit, given its significant stakes in a broad array of major international defense projects.

We expect European defense spending to rise from 1.7% of GDP in 2023 to 2.4% by 2029 and 2.8% by 2032, driving an increase in BAE’s air segment, munitions business, and platform business, with the Hägglunds combat vehicles set to triple in sales by 2026. In air, the Eurofighter Typhoon, manufactured by a consortium of BAE, Airbus, and Leonardo, has a current order log of 94, with commitments from countries such as Spain, Germany, Kuwait, and Qatar. Additionally, the Eurofighter group has expressed optimism about securing as many as 200 more orders in the next two years, targeting both current and potential new clients. Were it able to secure the extra orders, it would provide a substantially higher base for aftermarket services.

Furthermore, BAE is well aligned with US Defense Department growth programs, from which it derives 45% of its revenue. In the short term, orders to resupply munitions to Ukraine are driving the increase in US defense spending, while longer term, the Defense Department has prioritized military modernization due to rising tensions with China and Russia. In the United States, BAE’s 15% program share on the F-35 Lightning II fighter will support revenue for the next 15-20 years on production alone, while combat vehicle revenue is set to double over the next five years. In addition, the US Navy is looking to increase the size of its fleet, which bodes well for BAE’s US ship repair business as ship retirements are delayed and mothballed ships reenter service.

The military collaboration among Australia, the UK, and the US will benefit BAE, as it is the prime contractor in Australia and the UK and has been selected to build Australia’s nuclear submarine fleet.

Read more about BAE Systems here.

PACCAR

• Morningstar Price/Fair Value: 0.78
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 1.34%
• Industry: Farm & Heavy Construction Machinery

Paccar is a leading manufacturer of medium- and heavy-duty trucks under the premium nameplates Kenworth and Peterbilt, which are primarily sold in the Americas and Australia, and DAF, which primarily services Europe and South America. The firm earns a narrow economic moat rating, and the shares of its stock look 22% undervalued relative to our $126 fair value estimate.

Paccar is incredibly well-managed, with margins and returns that are superior to its peers. This owes primarily to its premium product offering and strong number-two position in North America. Paccar justifies its pricing power by offering customers higher-quality and more fuel-efficient products that reduce their total cost of ownership. Management maintains a fortress balance sheet with a near $10 billion cash hoard, no debt, and a conservatively capitalized finance subsidiary. This allows Paccar to always be well invested and achieve impressive milestones such as 86 consecutive years of profitability and paying a dividend every year since the 1940s. While some could call the balance sheet somewhat “lazy,” this approach has clearly contributed to the company’s strong performance through the ups and downs of the truck cycle.

We anticipate that Paccar’s top line will broadly track the modest GDP-plus growth trends of the heavy-duty truck market and continue to gradually take share from peers. Given its financial strength, we are highly confident the company will keep up, if not lead the way, as the trucking industry continues to pursue alternative powertrains and autonomous technologies. Perhaps most interesting will be the company’s engine strategy and whether it continues to insource and reduce reliance on key supplier, Cummins. Since 2010, Paccar has been offering its own engines on its North American trucks (Kenworth and Peterbilt), with approximately one-third of its trucks now equipped with its engines. This has enhanced the growth and profitability of its parts business. Should the company choose to take more business away from Cummins, truck profitability will likely improve from insourcing. More importantly, over the longer term, there will be a very positive flow through to the parts business as the growing installed base of engines requires costly service from Paccar. Regardless, shifting trends in powertrain technologies likely create more opportunities for the company.

Read more about PACCAR here.

Equifax

• Morningstar Price/Fair Value: 0.79
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Forward Dividend Yield: 0.96%
• Industry: Consulting Services

Along with Experian and TransUnion, Equifax is one of the leading credit bureaus in the United States. Trading 21% below our fair value estimate, Equifax has an economic moat rating of wide. We think shares of this stock are worth $265 per share.

Along with Experian and TransUnion, Equifax is one of the Big Three US credit bureaus. Given the fixed costs inherent in a data-intensive business, Equifax has been able to enjoy strong operating leverage from incremental revenue. As the US credit bureau market is relatively mature, the company has been adding new capabilities and expanding its geographic footprint organically and through acquisitions. As an example of its bolt-on acquisition strategy, Equifax purchased e-commerce fraud prevention platform Kount for $640 million in 2021. Outside the US, Equifax has international operations in both developed and developing countries. The acquisition of Boa Vista in 2023 gave Equifax entry into Brazil.

Equifax’s star in recent years has been its workforce solutions business, which is now its largest segment. Workforce solutions includes income verification, primarily for mortgages. We expect Equifax’s competitive position to persist as the large amount of existing records and the difficulty of convincing employers to share employee information would be too tough for new entrants to overcome. We expect Equifax to focus on expanding use cases of income verification beyond mortgages to autos, cards, government services, and employment screening. Workforce solutions also includes employer services, which consist of employee onboarding solutions, I-9 management, tax form services, and unemployment claims processing. Growth by acquisition in workforce solutions has also been a focus, most notably with its $1.8 billion deal to buy Appriss Insights.

Equifax’s reputation took a beating after a well-publicized data breach in 2017. This wasn’t the first time Equifax had suffered a data breach; however, the depth and breadth of the breach created ire among the public and showed that the company wasn’t prepared to handle customer data securely. Since then, Equifax has invested heavily in cybersecurity and incurred significant legal and product liability costs. In our view, Equifax has largely put the episode behind it.

Read more about Equifax here.

Copart

• Morningstar Price/Fair Value: 0.79
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Forward Dividend Yield: None
• Industry: Specialty Business Services

Based in Dallas, Copart operates an online salvage vehicle auction with operations in 11 countries across North America, Europe, and the Middle East, facilitating over 3.5 million transactions annually. Trading 21% below our fair value estimate, Copart has an economic moat rating of wide. We think shares of this stock are worth $52 per share.

Since its 1982 founding, Copart has grown into the largest online salvage vehicle auction operator in the United States, connecting buyers and sellers around the world. The company has grown its top line over five-fold since fiscal 2011 due to a combination of significant land expansion and robust service quality to drive higher salvage vehicle volume. Copart receives the majority of its vehicle volume through contracts with large auto insurers and sells them on consignment for high margins to dismantlers or retailers in emerging markets. The company prioritizes maintaining amicable insurance relationships which are fostered by having adequate storage capacity (even after storms) and providing flexible service. All auctions have been online since 2003.

Strong customer service means having ample land capacity and adequate staffing levels to handle an influx of salvage vehicle volume on short notice after a disaster. A strong balance sheet facilitates this service. Since 2015, Copart has nearly tripled its total acreage and emphasized expanding capacity in areas at high risk of suffering from natural disasters. In 2017, Copart took assignment of over 90,000 damaged vehicles from Hurricane Harvey by temporarily leasing additional swaths of land and contracting with towing companies. The company’s impressive service prompted market share gains as a major US auto insurer subsequently shifted portions of its salvage vehicle volume to Copart from competitor IAA (now owned by RB Global). Copart typically incurs a loss when serving an area affected by a severe natural disaster as labor and subhaul costs exceed revenue from additional vehicle volume. However, management steadfastly believes that superior customer service during these times helps foster stronger insurance relationships and future volume growth.

Copart has continued to aggressively add land (which it owns unlike IAA) both domestically and internationally over the years, though international expansion remains more nascent. Copart has integrated itself into the salvage vehicle resale process by emphasizing its ancillary service offerings such as vehicle title transfer and salvage estimation services.

Read more about Copart here.

Boeing

• Morningstar Price/Fair Value: 0.79
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Wide
• Forward Dividend Yield: None
• Industry: Aerospace & Defense

Boeing is a major aerospace and defense firm operating in three segments: commercial airplanes; defense, space, and security; and global services. Boeing is an affordable industrials stock, trading at a 21% discount to our fair value estimate of $246 per share. The aerospace and defense company earns a wide economic moat rating.

Boeing is a major aerospace and defense firm that historically made most of its money manufacturing large commercial airplanes. Its narrow-body planes are well suited for high-frequency, short-haul routes, and its wide-body ones are ideal for long-haul and transcontinental flights. Worldwide sales of narrow-bodies have increased faster than wide-bodies over the past 20 years with the rise of low-cost carriers and middle-class consumers in emerging markets.

Boeing’s narrow-body business was battered by the extended grounding of its 737 MAX due to two fatal crashes of the plane before the covid-19 pandemic. The pandemic cut air travel by two thirds between 2019 and 2020. Boeing’s primary competitor, Airbus, saw a one-third drop in airplane deliveries while Boeing had to cease deliveries of its workhorse plane entirely for 20 months to rework the navigation and other systems on hundreds of jets as manufacturing defects from Spirit Aero, its fuselage supplier, also came to light. With long-term increases in demand for air travel in emerging-market economies, Boeing aims to expand 737 MAX production to meet that demand once the safety standards of its manufacturing process have again been approved by the Federal Aviation Administration. Our forecast anticipates Chinese carriers will take up to one fourth of new airplanes in the next decade.

We think Boeing’s wide-body 787 Dreamliner is a fantastic aircraft for long-haul travel, but it too experienced a monthslong production halt as manufacturing quality issues were ironed out and planes refurbished while in inventory. Deliveries recommenced in August 2022, but we don’t expect them to return to 2019 levels until 2029.

Boeing also supplies military products to governments and aftermarket services to its commercial customers. These businesses together generate just over a third of its operating income over a cycle. We broadly assume GDP-like growth in the defense business and expect the services business will remain more profitable than Boeing as a whole.

Read more about Boeing here.

RELX

• Morningstar Price/Fair Value: 0.80
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: Wide
• Forward Dividend Yield: 2.09%
• Industry: Specialty Business Services

RELX is a global provider of information-based analytics and decision tools for professional and business customers in various industries. RELX is an affordable industrials stock, trading at a 20% discount to our fair value estimate of $52 per share. The specialty business services firm earns a wide economic moat rating.

RELX, based in the UK, is a global provider of business information, analytics, and decision-making tools for professionals in various industries. It generates revenue mainly by creating and selling access to curated information databases, analytics, and journals. In addition, RELX organizes major events such as trade shows and conferences.

Nearly all information and analytics products are delivered digitally, print is now a minor part of the business. Offerings are sold mainly by subscription, which accounts for around 55% of revenue. However, the majority of the remaining 45% transactional revenue is under long-term contracts with volumetric elements, so essentially recurring in nature.

The core tenet of RELX’s strategy is to grow its portfolio of information-based analytics and decision-making tools to help its customers be more productive and make better decisions in their day-to-day workflow. The company also aims to expand into higher growth adjacencies and geographies organically and through selective acquisitions. Last, RELX focuses on continuous process innovation to manage cost growth below revenue growth.

The company does not give hard numbers for its strategic targets. Instead, the company aims to deliver an improving revenue and earnings growth profile and higher returns. In our view, investors can typically expect mid-single-digit organic revenue growth and a 10- to 40-basic-point increase in adjusted operating margin each year in what we think is a low-uncertainty business.

Read more about RELX here.

IDEX

• Morningstar Price/Fair Value: 0.80
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Wide
• Forward Dividend Yield: 1.67%
• Industry: Specialty Industrial Machinery

Specialty industrial machinery firm IDEX rounds out our list of best industrials stocks to buy. Idex manufactures pumps, flow meters, valves, and fluidic systems for customers in a variety of end markets, including industrial, fire and safety, life science, and water. The stock is 20% undervalued relative to our fair value estimate of $212 per share.

Idex owns a collection of moaty businesses that tend to be leaders in their niche end markets, typically holding the number-one or -two market share. The company manufactures a wide array of products, ranging from equipment used in DNA sequencing to wastewater pumps to Jaws of Life hydraulic rescue tools. Idex’s Lean manufacturing prowess allows it to effectively operate in a high-mix and low-volume environment, offering customers a wide variety of highly engineered products that are configurable or customizable. A common theme across the businesses is that they specialize in making mission-critical equipment that performs a vital function but typically constitutes a small part of the customer’s total bill of materials. This aspect contributes to Idex’s wide moat through customer switching costs and allows the company to command premium pricing.

In the long run, we view Idex as a GDP-plus business. We think that organic sales growth will continue to outpace industrial production by around 1%-2% annually as the firm’s commitment to innovation and investments in research and development continue to bear fruit and generate additional revenue through introductions of new or refreshed products. We project organic sales to grow at a roughly low-single-digit clip in fluid and metering technologies as well as the fire and safety and diversified products segment, and at a mid-single-digit rate in the health and science technologies segment.

We expect that the firm will continue to supplement its organic sales growth with acquisitions. Historically, management has avoided overpaying for acquisitions. As such, despite regular mergers and acquisitions, which add goodwill and assets to the firm’s capital base, Idex has consistently generated returns on invested capital in the upper midteens. Management has remained disciplined in the current elevated valuation environment, and we have confidence that it will continue to manage acquisition risk appropriately and focus on maximizing ROICs.

Read more about IDEX here.

How to Find More of the Best Industrials Stocks to Buy

Investors who’d like to extend their search for top industrials stocks can do the following:

• Review Morningstar’s comprehensive list of industrials stocks to investigate further.
• Stay up to date on the industrials sector’s performance, key earnings reports, and more with Morningstar’s industrials sector page.
• Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
• Use the Morningstar Investor screener to build a shortlist of industrials stocks to research and watch.