2 Magnificent Industrial Stocks Down 40% to Buy and Hold Forever
Many industrial stocks slumped over the past year as geopolitical conflicts, inflation, potential interest rate hikes, and other macro headwinds threatened to disrupt the global economy. However, that pressure is creating some good buying opportunities for long-term investors.
Two of those stocks are UPS (UPS -1.72%) and Fluor (FLR -1.94%), which are both trading about 40% below their all-time highs. Let’s see why these two stocks slumped — and why they could still be great stocks to buy and hold forever as many investors look the other way.
Image source: Getty Images.
UPS
UPS is one of the world’s largest shipping couriers. But after reaching an all-time high of $192.88 in February 2022, its stock has pulled back by more than 40%.
A post-pandemic drop in deliveries hit UPS, while inflation, intense competition from FedEx and other couriers, and an intentional reduction in Amazon‘s lower-margin orders exacerbated the pressure. Its margins were further compressed after it struck a new contract with the Teamsters union to avert a strike in 2023.
Today’s Change
(-1.72%) $-1.88
Current Price
$107.23
Key Data Points
Market Cap
Day’s Range
$106.92 – $109.30
52wk Range
$82.00 – $122.41
Volume
1.3M
Avg Vol
5.4M
Gross Margin
17.04%
Dividend Yield
6.01%
From 2021 to 2025, UPS’ average daily package volume fell from 25.25 million to 20.85 million, its total revenue dropped from $97.3 billion to $88.7 billion, and its adjusted EPS declined from $12.13 to $7.16. Those numbers seem grim, but UPS has been stabilizing its business by securing higher-margin orders from small- to medium-sized businesses and healthcare customers, trimming its workforce, and automating more of its logistics network. Those efforts are offsetting the loss of Amazon orders — a necessary move to protect its long-term margins.
For 2026, UPS expects its revenue and adjusted EPS to rise 3% and 1%, respectively. That would mark the first time its revenue and adjusted EPS grew together since 2022. That stabilization also counters the notion that its business would become obsolete.
Analysts expect UPS’ revenue and adjusted EPS to grow 4% and 12%, respectively, in 2027. Its stock still looks like a bargain at 14 times forward earnings, and it pays a high forward yield of 6.3%. UPS isn’t an exciting investment, but its stabilization could make it attractive again to value-seeking income investors.
Fluor
Fluor is one of the world’s largest engineering and construction firms. Its stock closed at a record high of $82.64 in June 2008, but it still trades nearly 40% below that price.
Fluor’s stock went through several boom-and-bust cycles. Its business thrived when a healthy economy with low interest rates drove energy companies, government agencies, and municipal governments to ramp up their spending on big construction projects.
Today’s Change
(-1.94%) $-1.00
Current Price
$50.54
Key Data Points
Market Cap
Day’s Range
$50.47 – $52.37
52wk Range
$39.33 – $54.79
Volume
725.2K
Avg Vol
2.7M
Gross Margin
-162.66%
But the global financial crisis in 2008, the oil crash in 2014, and the COVID-19 pandemic in 2020 all caused severe delays, cost overruns, and execution issues. That’s why it’s often considered a cyclical stock instead of a reliable long-term investment.
However, several major changes could help Fluor break out of that cycle. First, it’s shifting from fixed-price megaprojects to reimbursable ones as it phases out its riskier lump-sum projects. More than 80% of its backlog now consists of reimbursable contracts, which require its clients to cover their own labor, material, and equipment costs while paying the company additional fees.
Second, it recently liquidated its entire stake in NuScale, a developer of small modular reactors (SMRs), to generate an estimated raw profit of $1.86 billion. It will likely plow a lot of that cash into buybacks to boost its EPS.
Fluor is well-positioned to profit from the expansion of the cloud, AI, industrial, and nuclear markets over the next few years. From 2025 to 2028, analysts expect its revenue to grow at a 5% CAGR. They also expect it to return to profitability in 2026 and grow its EPS at a 2% CAGR through 2028. Its stock still looks cheap at 15 times next year’s earnings, and it could attract more attention once the macro environment warms up again.
