The quiet revolution – industrial stocks beating Wall Street!
No future promises, no flashy ads, no metaverse, and no AI.
Just quiet, focused performance on the ground.
And here's the question that's gaining more and more traction:
How is it that stocks like $PWR and $URI outperform the S&P index over time, and by a significant margin – yet are barely talked about?
Let's start from the beginning:
Most retail investors are mainly familiar with technology stocks: Apple, Nvidia, Tesla, Google.
And rightly so – they generate innovation and lead newspaper headlines.
But the American market is deep and broad, and sometimes – giant companies are beyond the headlines and noise.
Let's start with - $PWR (Quanta Services)
Brief ID: Quanta is not a startup – but an electricity infrastructure giant!
The company is responsible for – planning, installation, and maintenance of electrical systems, renewable energy, communications, and critical infrastructure.
What turned it into a super machine of returns?
1. The energy revolution in the US – the US power grid is undergoing a dramatic upgrade.
Connecting wind turbines, solar panels, electric vehicle charging stations – requires hundreds of thousands of kilometers of new infrastructure.
And who handles all the behind-the-scenes operations? - Quanta!
After all, it has experience, equipment, manpower, and especially a huge backlog of orders for the coming decade.
2. The government is pouring billions into infrastructure – and companies like Quanta directly benefit from this.
The numbers don't lie:
The stock of $PWR (Quanta) has risen by over 500% in the last decade!
Revenue growing at a double-digit rate.
Earnings per share have been rising year after year.
Reasonable debt ratio, positive cash flow, and management that delivers results.
Company $URI – United Rentals
United Rentals doesn't produce chips – it rents out tractors, cranes, and heavy equipment.
Sounds boring?
Think again.
Why is its model so brilliant?
1. An economic model of renting instead of buying – contractors, infrastructure, industry – prefer not to own expensive equipment, but to rent it.
2. Huge operating return – company $URI buys equipment once and then rents it out again and again and again with high profit margins.
3. National presence in the US – they have hundreds of branches covering almost every market, including remote areas.
The result? - Impressive profitability growth over the years!
- Cash flow that enables buybacks.
And the stock? It has soared by over 800% since 2015!
So how did they outperform the S&P 500?
Here are 3 things that caught our eye:
1. Strong tailwinds – macro trends in infrastructure, energy, and construction – that the US government itself is pushing forward.
2. Recurring revenue, long-term contracts, high operating profitability – without dependence on the private consumer.
3. Little noise - less speculation, less hype, less competition with Chinese companies over the same chip.
There are investors who, while everyone is chasing the next popular thing – look for companies that are actually building the future.
Yes, sometimes the sexiest stock is the one with the most mud on its tires.
These two companies are included in MidCap indices – not the large-cap indices.
But precisely there – in the "mid-cap" indices – sometimes unpolished diamonds are hidden.
Companies like $PWR and $URI are a fascinating lesson on how demand and proper management – beat any dream.