Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates), and the market seems convinced that demand will slow. Due to this bearish outlook, the industry has tumbled by 2.2% over the past six months. This drop was disheartening since the S&P 500 stood firm.

Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one resilient industrials stock at the top of our wish list and two we’re steering clear of.

Two Industrials Stocks to Sell:

Icahn Enterprises (IEP)

Market Cap: $4.67 billion

Founded in 1987, Icahn Enterprises (NASDAQ: IEP) is a diversified holding company primarily engaged in investment and asset management across various sectors.

Why Do We Avoid IEP?

1. Annual sales declines of 16% for the past two years show its products and services struggled to connect with the market during this cycle

2. 11.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

3. High net-debt-to-EBITDA ratio of 50× could force the company to raise capital at unfavorable terms if market conditions deteriorate

At $9.00 per share, Icahn Enterprises trades at 0.5x forward price-to-sales. Read our free research report to see why you should think twice about including IEP in your portfolio, it’s free .

RTX (RTX)

Market Cap: $171 billion

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.

Why Are We Cautious About RTX?

1. Estimated sales growth of 4.6% for the next 12 months implies demand will slow from its two-year trend

2. Earnings per share fell by 1.9% annually over the last five years while its revenue grew, partly because it diluted shareholders

3. Underwhelming 2.4% return on capital reflects management’s difficulties in finding profitable growth opportunities

RTX’s stock price of $128.52 implies a valuation ratio of 20.9x forward price-to-earnings. Check out our free in-depth research report to learn more about why RTX doesn’t pass our bar .

One Industrials Stock to Buy:

FTAI Aviation (FTAI)

Market Cap: $10.83 billion

With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.