3 Industrial Stocks to Buy as Sector Momentum Builds in 2026

Industrial stocks have enjoyed a solid start to 2026, supported by improving economic visibility and renewed investor appetite for cyclical sectors. The State Street Industrial Select Sector SPDR ETF (XLI) has advanced 12.8% year to date, reflecting broad-based strength across aerospace, machinery, transportation and construction-related names. Kaiser Aluminum Corporation KALU, The Gorman-Rupp Company GRC and Century Aluminum Company CENX are three industrial stocks that should be looked into as the sector makes gains.

One of the primary drivers has been resilience in U.S. manufacturing activity. After a choppy 2025, leading indicators such as new orders and capital spending intentions have stabilized, encouraging investors to rotate into companies leveraged to economic expansion. Easing input cost pressures and improved supply chain efficiency have also lifted margins for diversified industrial firms. Meanwhile, steady infrastructure spending and public-sector projects have continued to provide a reliable demand backdrop, particularly for engineering and construction companies.

Defense and aerospace stocks have further underpinned the sector’s gains, supported by sustained government outlays and a healthy commercial aviation cycle. Transportation names have benefited from improving freight volumes and signs of normalization in global trade flows. Additionally, expectations that interest rates may moderate later in the year have bolstered confidence in capital-intensive industries, as lower financing costs could spur equipment purchases and factory upgrades.

In a market that began the year grappling with valuation concerns in high-growth technology stocks, industrials have stood out as a compelling blend of cyclical upside and relative earnings visibility. As long as economic momentum remains intact and capital spending trends hold firm, the sector appears positioned to maintain its constructive tone on Wall Street.

Our Choices

The stocks below have a Zacks Rank #1 (Strong Buy) or #2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here, V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics. Such a score allows one to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kaiser Aluminum is a semi-fabricated specialty aluminum mill products company. KALU’s expected earnings growth rate for the current year is 142.6%. The Zacks Consensus Estimate for its current-year earnings has increased 3.8% over the past 60 days. This Zacks Rank #1 company has a VGM Score of A.

The Gorman-Rupp Company designs, manufactures and markets a wide range of pumps and pumping systems used globally in water, wastewater, industrial, construction, municipal, petroleum and other fluid-handling applications. GRC’s expected earnings growth rate for the current year is 8.4%. The Zacks Consensus Estimate for its current-year earnings has increased 3.1% over the past 60 days. This Zacks Rank #2 company has a VGM Score of B.

Century Aluminum Company produces and sells primary aluminum products, operating smelters in the United States and Iceland and owning related facilities for carbon anode production and alumina mining and refining. CENX’s expected earnings growth rate for the next year is 312.3%. The Zacks Consensus Estimate for its next-year earnings has increased 42.1% over the past 60 days. This Zacks Rank #1 company has a VGM Score of A.

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This article originally published on Zacks Investment Research (zacks.com).

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