As Tech Stocks Stumble Industrials Are A Buy in 2026 (And 3 Stocks Leading the Way)
Industrial stocks delivered steady growth in 2025 while tech volatility rattled portfolios. Specialty chemicals and industrial gas companies expanded margins and generated resilient cash flows. The Nasdaq-100 has declined 2.3% year-to-date through February 17, creating a contrasting backdrop for industrial sector performance. With prediction markets pricing just 22.5% recession odds through 2026, these essential-product manufacturers continue serving steady industrial demand.
The industrial sector’s performance rests on fundamentals. Manufacturing value-added surged 3.2% in Q3 2025, accelerating from prior quarters and matching information sector growth. Industrial gas and specialty chemical producers serve non-negotiable needs across healthcare, manufacturing, energy, and electronics. Their pricing power, long-term contracts, and operational leverage create predictable earnings streams.
Air Products and Chemicals (NYSE:APD)
Air Products and Chemicals (NYSE:APD) delivered a strong start to fiscal 2026, reporting Q1 revenue of $3.10 billion and adjusted EPS of $3.16, beating estimates of $3.04 despite helium market headwinds. The 10% year-over-year earnings growth demonstrates operational strength, with adjusted operating income rising 12% to $757 million.
Air Products’ positioning in clean energy infrastructure separates it from commodity chemical peers. The company secured NASA contracts exceeding $140 million and advanced negotiations with Yara for low-emission ammonia projects, validating its hydrogen and carbon capture technology leadership. With 44 consecutive years of dividend increases and 13.6% year-to-date gains through February 17, APD combines growth optionality with income reliability. Management’s fiscal 2026 guidance of $12.85-$13.15 adjusted EPS and $4 billion capex signals confidence in project execution.
Ecolab (NYSE:ECL)
Ecolab (NYSE:ECL) posted record fiscal 2025 results with $16 billion in sales and 15% Q4 adjusted EPS growth. The company’s water treatment, hygiene, and infection prevention solutions serve mission-critical functions across 170+ countries, protecting one-third of global food production and one-quarter of power generation. This essential positioning drove 3% organic sales growth and 140 basis points of operating margin expansion to 18.5% in Q4.
Ecolab’s digital transformation and productivity initiatives are accelerating profitability. The One Ecolab program now targets $325 million in annualized savings by 2027, up from $225 million previously. High-growth segments are delivering: Ecolab Digital surged 24% to $99 million, while Pest Elimination grew 8% with operating income jumping 46%. The Ovivo Electronics acquisition doubles Global High-Tech business, positioning Ecolab for double-digit growth in data center cooling technologies. With 15.7% year-to-date gains and 15.9% one-year returns through February 17, ECL trades on execution, not promises. Management’s 2026 guidance of 12-15% adjusted EPS growth reflects confidence in margin expansion and market share gains.
Linde (NASDAQ:LIN)
Linde (NASDAQ:LIN) stands as the industrial sector’s premier operator, combining global scale with exceptional capital discipline. The world’s largest industrial gas company generated fiscal 2025 sales of $34.0 billion and adjusted operating profit of $10.1 billion, producing a 29.5% operating margin that few industrials match. More impressive: Linde achieved 24.2% return on capital while maintaining a $10.0 billion project backlog, demonstrating both current profitability and future growth visibility.
Geographic diversification insulates Linde from regional weakness. Americas revenue rose 8% to $3.88 billion with 30.9% margins, APAC grew 3% to $1.73 billion with 29.1% margins, and EMEA expanded 6% to $2.18 billion with 35.4% margins. This balanced exposure across chemicals, energy, electronics, healthcare, and manufacturing creates operational resilience. Linde returned $7.4 billion to shareholders in 2025 while investing in hydrogen infrastructure and carbon capture solutions that position the company for energy transition tailwinds.
The stock reflects this quality, gaining 12.9% year-to-date and 106% over five years through February 17. With 2026 guidance of $17.40-$17.90 adjusted EPS representing 6-9% growth, Linde offers predictable earnings expansion. Analysts maintain a $510 target with 23 buy ratings versus just 4 hold or sell, validating the premium valuation for best-in-class operations.
Industrial Sector Performance Summary
These three companies demonstrate consistent operational performance in industrial markets. They generate cash from essential products with pricing power, expand margins through operational excellence, and return capital consistently. Linde, Air Products, and Ecolab have delivered compounding returns through disciplined execution in markets serving non-discretionary industrial demand.