Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 11.3% over the past six months. This performance was worse than the S&P 500’s 5.7% loss.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here are two industrials stocks boasting durable advantages and one that may face trouble.

One Industrials Stock to Sell:

L.B. Foster (FSTR)

Market Cap: $215.7 million

Founded with a $2,500 loan, L.B. Foster (NASDAQ:FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.

Why Do We Avoid FSTR?

1. Sales tumbled by 1.5% annually over the last five years, showing market trends are working against its favor during this cycle

2. Poor free cash flow margin of 0.8% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

3. Underwhelming 4.9% return on capital reflects management’s difficulties in finding profitable growth opportunities

L.B. Foster is trading at $19.91 per share, or 4.8x forward EV-to-EBITDA. To fully understand why you should be careful with FSTR, check out our full research report (it’s free) .

Two Industrials Stocks to Watch:

Primoris (PRIM)

Market Cap: $3.20 billion

Listed on the NASDAQ in 2008, Primoris (NYSE:PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.

Why Are We Fans of PRIM?

1. Annual revenue growth of 20% over the past two years was outstanding, reflecting market share gains this cycle

2. Earnings per share grew by 23.2% annually over the last two years and trumped its peers

3. ROIC of 10.3% shows management can invest its resources competently

At $57.11 per share, Primoris trades at 14.9x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free .

SmartRent (SMRT)

Market Cap: $171.3 million

Founded by an employee at a real estate rental company, SmartRent (NYSE:SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.

Why Does SMRT Stand Out?

1. Annual revenue growth of 35.1% over the past four years was outstanding, reflecting market share gains this cycle

2. Ability to secure long-term commitments with customers is evident in its 41.5% average ARR growth over the past two years

3. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 52.1% annually, topping its revenue gains