10 Best Industrials Moat Stocks for November 2025
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Market Overview & Selection Criteria
The current market landscape is marked by heightened volatility, sector rotation, and a renewed focus on quality fundamentals. At ValueSense, our stock selection methodology emphasizes intrinsic value, robust free cash flow, and sustainable returns on invested capital (ROIC). Using our proprietary screening tools, we identify companies with strong financial health, attractive valuations, and durable business models. This watchlist highlights stocks across industrials, analytics, and business services, each vetted for quality, growth potential, and risk profile using ValueSense’s advanced analytics[1][2].
Featured Stock Analysis
Automatic Data Processing, Inc. (ADP)
| Metric | Value |
|---|---|
| Market Cap | $105.5B |
| Quality Rating | 6.5 |
| Intrinsic Value | $129.5 |
| 1Y Return | -9.5% |
| Revenue | $20.9B |
| Free Cash Flow | $4,601.0M |
| Revenue Growth | 7.1% |
| FCF margin | 22.0% |
| Gross margin | 48.3% |
| ROIC | 15.1% |
| Total Debt to Equity | 149.4% |
Investment Thesis
Automatic Data Processing (ADP) stands out as a global leader in payroll and human capital management solutions. With a market cap of $105.5B, ADP’s consistent revenue growth (7.1% YoY) and robust free cash flow $4.6B underscore its resilience in both stable and uncertain economic environments. The company’s high gross margin 48.3% and solid ROIC 15.1% reflect operational efficiency and prudent capital allocation. Despite a recent 1-year return of -9.5%, ADP’s intrinsic value $129.5 suggests potential undervaluation relative to its fundamentals.
Key Catalysts
- Expansion of cloud-based HR solutions and digital transformation in payroll services
- Recurring revenue streams from long-term client contracts
- Ongoing automation and AI integration to drive margin improvement
Risk Factors
- Elevated total debt to equity 149.4% may limit financial flexibility
- Competitive pressures from fintech and SaaS disruptors
- Sensitivity to employment cycles and macroeconomic downturns
TransDigm Group Incorporated (TDG)
| Metric | Value |
|---|---|
| Market Cap | $76.0B |
| Quality Rating | 7.1 |
| Intrinsic Value | $799.7 |
| 1Y Return | 0.5% |
| Revenue | $8,580.0M |
| Free Cash Flow | $1,906.0M |
| Revenue Growth | 12.8% |
| FCF margin | 22.2% |
| Gross margin | 58.6% |
| ROIC | 18.4% |
| Total Debt to Equity | (500.6%) |
Investment Thesis
TransDigm Group (TDG) is a specialized aerospace components manufacturer with a $76.0B market cap. The company’s strong revenue growth (12.8% YoY) and industry-leading gross margin 58.6% highlight its pricing power and niche positioning. TDG’s free cash flow margin 22.2% and high ROIC 18.4% indicate efficient capital deployment. While the 1-year return is modest 0.5%, the intrinsic value estimate $799.7 points to long-term value creation potential.
Key Catalysts
- Recovery in global air travel and aftermarket parts demand
- Proprietary product portfolio with high barriers to entry
- Strategic acquisitions to expand market share
Risk Factors
- Extremely high total debt to equity 500.6% increases leverage risk
- Exposure to cyclical aerospace industry trends
- Regulatory and supply chain uncertainties
Illinois Tool Works Inc. (ITW)
| Metric | Value |
|---|---|
| Market Cap | $71.3B |
| Quality Rating | 6.3 |
| Intrinsic Value | $220.4 |
| 1Y Return | -6.0% |
| Revenue | $15.9B |
| Free Cash Flow | $2,845.0M |
| Revenue Growth | (0.4%) |
| FCF margin | 17.9% |
| Gross margin | 43.8% |
| ROIC | 26.8% |
| Total Debt to Equity | 278.7% |
Investment Thesis
Illinois Tool Works (ITW) is a diversified industrials conglomerate with a $71.3B market cap. Despite a slight revenue contraction (-0.4% YoY), ITW maintains a robust ROIC 26.8% and healthy free cash flow $2.8B. The company’s gross margin 43.8% and quality rating 6.3 reflect operational discipline. With a 1-year return of -6.0% and an intrinsic value of $220.4, ITW offers a blend of stability and potential upside for value-focused investors.
Key Catalysts
- Broad end-market exposure supporting resilience across cycles
- Ongoing cost optimization and margin expansion initiatives
- Strategic bolt-on acquisitions to drive incremental growth
Risk Factors
- High total debt to equity 278.7% could constrain future investments
- Sluggish revenue growth in mature segments
- Global supply chain disruptions impacting manufacturing
Paychex, Inc. (PAYX)
| Metric | Value |
|---|---|
| Market Cap | $42.1B |
| Quality Rating | 6.9 |
| Intrinsic Value | $56.4 |
| 1Y Return | -14.9% |
| Revenue | $5,793.2M |
| Free Cash Flow | $1,922.7M |
| Revenue Growth | 9.1% |
| FCF margin | 33.2% |
| Gross margin | 72.8% |
| ROIC | 19.1% |
| Total Debt to Equity | 1.8% |
Investment Thesis
Paychex (PAYX) is a leading provider of payroll and HR outsourcing solutions, with a $42.1B market cap. The company’s impressive free cash flow margin 33.2% and gross margin 72.8% underscore its scalable business model. PAYX’s revenue growth (9.1% YoY) and high ROIC 19.1% further support its quality rating 6.9. Despite a 1-year return of -14.9%, the intrinsic value $56.4 suggests potential for recovery as demand for digital HR services accelerates.
Key Catalysts
- Rising adoption of cloud-based payroll and HR platforms among SMBs
- Expansion into ancillary services (retirement, insurance)
- Strong balance sheet with low debt to equity 1.8%
Risk Factors
- Competitive pricing pressures in the HR tech space
- Economic downturns impacting small business clients
- Regulatory changes affecting payroll compliance
Verisk Analytics, Inc. (VRSK)
| Metric | Value |
|---|---|
| Market Cap | $30.5B |
| Quality Rating | 7.3 |
| Intrinsic Value | $205.2 |
| 1Y Return | -20.3% |
| Revenue | $3,029.5M |
| Free Cash Flow | $1,115.8M |
| Revenue Growth | 7.3% |
| FCF margin | 36.8% |
| Gross margin | 69.6% |
| ROIC | 30.7% |
| Total Debt to Equity | 1,295.0% |
Investment Thesis
Verisk Analytics (VRSK) delivers data analytics and risk assessment solutions, boasting a $30.5B market cap. The company’s high gross margin 69.6% and exceptional ROIC 30.7% reflect a defensible business model. With a 1-year return of -20.3%, VRSK appears undervalued relative to its intrinsic value $205.2. The strong free cash flow margin 36.8% and quality rating 7.3 position Verisk as a compelling analytics sector pick.
Key Catalysts
- Growing demand for advanced risk analytics in insurance and finance
- Expansion into new verticals and geographies
- High switching costs and recurring revenue streams
Risk Factors
- Elevated total debt to equity 1,295.0% presents financial risk
- Customer concentration in insurance sector
- Regulatory scrutiny of data privacy practices
Veralto Corporation (VLTO)
| Metric | Value |
|---|---|
| Market Cap | $24.5B |
| Quality Rating | 6.1 |
| Intrinsic Value | $64.7 |
| 1Y Return | -3.3% |
| Revenue | $5,452.0M |
| Free Cash Flow | $986.0M |
| Revenue Growth | 6.2% |
| FCF margin | 18.1% |
| Gross margin | 60.0% |
| ROIC | 22.9% |
| Total Debt to Equity | 93.9% |
Investment Thesis
Veralto Corporation (VLTO) operates in the industrial technology space, with a $24.5B market cap. The company’s gross margin 60.0% and ROIC 22.9% highlight efficient operations. VLTO’s revenue growth (6.2% YoY) and free cash flow $986M support its quality rating 6.1. With a 1-year return of -3.3% and an intrinsic value of $64.7, Veralto offers a balanced risk-reward profile for investors seeking industrial exposure.
Key Catalysts
- Expansion into water quality and environmental solutions
- Margin improvement through operational efficiencies
- Strategic M&A to broaden product portfolio
Risk Factors
- Moderate total debt to equity 93.9% could impact flexibility
- Cyclical demand in industrial end markets
- Integration risks from acquisitions
Snap-on Incorporated (SNA)
| Metric | Value |
|---|---|
| Market Cap | $17.5B |
| Quality Rating | 6.9 |
| Intrinsic Value | $310.8 |
| 1Y Return | 2.9% |
| Revenue | $5,014.9M |
| Free Cash Flow | $1,026.5M |
| Revenue Growth | 0.2% |
| FCF margin | 20.5% |
| Gross margin | 51.5% |
| ROIC | 23.3% |
| Total Debt to Equity | 21.8% |
Investment Thesis
Snap-on (SNA) is a leading manufacturer of professional tools and equipment, with a $17.5B market cap. The company’s stable revenue base $5B and strong free cash flow $1B support a high FCF margin 20.5%. SNA’s gross margin 51.5% and ROIC 23.3% reflect operational excellence. With a 1-year return of 2.9% and an intrinsic value of $310.8, Snap-on is positioned as a steady performer in the industrials sector.
Key Catalysts
- Expansion of product lines and digital diagnostics tools
- Growth in automotive and industrial end markets
- Strong brand loyalty among professional users
Risk Factors
- Exposure to cyclical automotive industry trends
- Modest revenue growth (0.2% YoY)
- Competition from lower-cost tool providers
UL Solutions Inc. (ULS)
| Metric | Value |
|---|---|
| Market Cap | $15.7B |
| Quality Rating | 6.8 |
| Intrinsic Value | $28.5 |
| 1Y Return | 50.9% |
| Revenue | $2,951.0M |
| Free Cash Flow | $364.0M |
| Revenue Growth | 6.9% |
| FCF margin | 12.3% |
| Gross margin | 48.3% |
| ROIC | 19.1% |
| Total Debt to Equity | 72.3% |
Investment Thesis
UL Solutions (ULS) provides safety science and certification services, with a $15.7B market cap. The company’s robust 1-year return 50.9% and revenue growth (6.9% YoY) highlight strong market momentum. ULS’s gross margin 48.3% and ROIC 19.1% support its quality rating 6.8. While the free cash flow margin 12.3% is lower than peers, ULS’s intrinsic value $28.5 and sector leadership make it a notable watchlist addition.
Key Catalysts
- Rising demand for product safety and regulatory compliance
- Expansion into new certification markets (e.g., cybersecurity)
- Strong global brand and customer trust
Risk Factors
- Moderate total debt to equity 72.3%
- Margin pressure from increased competition
- Regulatory changes impacting certification standards
Allegion plc (ALLE)
| Metric | Value |
|---|---|
| Market Cap | $14.2B |
| Quality Rating | 7.1 |
| Intrinsic Value | $95.1 |
| 1Y Return | 19.1% |
| Revenue | $3,979.7M |
| Free Cash Flow | $680.1M |
| Revenue Growth | 6.9% |
| FCF margin | 17.1% |
| Gross margin | 32.8% |
| ROIC | 20.2% |
| Total Debt to Equity | 107.2% |
Investment Thesis
Allegion (ALLE) specializes in security products and solutions, with a $14.2B market cap. The company’s solid revenue growth (6.9% YoY) and ROIC 20.2% reflect a healthy business model. ALLE’s gross margin 32.8% and free cash flow $680M support its quality rating 7.1. With a 1-year return of 19.1% and an intrinsic value of $95.1, Allegion offers exposure to the growing security and access control market.
Key Catalysts
- Increased demand for smart security and access solutions
- Expansion into commercial and institutional markets
- Product innovation and digital transformation
Risk Factors
- High total debt to equity 107.2%
- Cyclical construction and real estate markets
- Competitive pressures from global security firms
Graco Inc. (GGG)
| Metric | Value |
|---|---|
| Market Cap | $13.6B |
| Quality Rating | 6.8 |
| Intrinsic Value | $64.0 |
| 1Y Return | 0.7% |
| Revenue | $2,192.1M |
| Free Cash Flow | $624.9M |
| Revenue Growth | 2.9% |
| FCF margin | 28.5% |
| Gross margin | 52.3% |
| ROIC | 20.4% |
| Total Debt to Equity | 2.7% |
Investment Thesis
Graco (GGG) is a leader in fluid handling systems, with a $13.6B market cap. The company’s steady revenue growth (2.9% YoY), high gross margin 52.3%, and strong ROIC 20.4% highlight operational strength. GGG’s free cash flow margin 28.5% and low debt to equity 2.7% support its quality rating 6.8. With a 1-year return of 0.7% and an intrinsic value of $64.0, Graco is well-positioned for continued growth in industrial automation.
Key Catalysts
- Expansion into automation and precision manufacturing
- Growth in emerging markets and new applications
- Strong balance sheet enabling strategic investments
Risk Factors
- Slower growth in mature markets
- Exposure to cyclical industrial demand
- Potential for increased competition in core segments
Portfolio Diversification Insights
This watchlist spans industrials, analytics, business services, and safety certification, providing sectoral diversification and exposure to both cyclical and defensive business models. The inclusion of high-margin analytics (VRSK), stable industrials (ITW, SNA, GGG), and business services (ADP, PAYX) helps balance risk and return. Companies with strong free cash flow and high ROIC contribute to portfolio resilience, while varying debt levels and growth rates offer a mix of risk profiles suitable for diversified strategies.
Market Timing & Entry Strategies
Given current market volatility, staggered entry strategies such as dollar-cost averaging can help mitigate timing risk. Monitoring sector rotation and macroeconomic indicators may inform optimal entry points, especially for cyclical names. Investors may consider using ValueSense’s intrinsic value tools to identify stocks trading at a discount to fair value, and to track momentum in sectors showing early signs of recovery or sustained growth[1][2].
Explore More Investment Opportunities
For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:
📌 50 Undervalued Stocks (Best overall value plays for 2025)
📌 50 Undervalued Dividend Stocks (For income-focused investors)
📌 50 Undervalued Growth Stocks (High-growth potential with strong fundamentals)
🔍 Check out these stocks on the Value Sense platform for free!
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FAQ Section
Q1: How were these stocks selected?
Stocks were chosen using ValueSense’s proprietary screening tools, focusing on intrinsic value, quality ratings, free cash flow, and sector diversification. Each company was vetted for financial health, growth potential, and risk profile based on platform analytics[1][2].
Q2: What's the best stock from this list?
No single stock is universally “best”; each offers unique strengths. For example, Verisk Analytics (VRSK) scores highly on quality and ROIC, while TransDigm Group (TDG) excels in margin and growth. The best fit depends on individual investment goals and risk tolerance.
Q3: Should I buy all these stocks or diversify?
Diversification is a key principle in portfolio construction. This watchlist is designed to provide exposure across sectors and risk profiles, helping to reduce volatility and enhance long-term returns. Investors can use ValueSense tools to tailor allocations to their preferences.
Q4: What are the biggest risks with these picks?
Risks include high leverage (notably in TDG and VRSK), sector cyclicality (industrials, aerospace), and competitive pressures. Each stock’s risk profile is detailed in its analysis section; using ValueSense’s health and risk metrics can help monitor ongoing developments.
Q5: When is the best time to invest in these stocks?
Market timing is inherently challenging. ValueSense recommends using intrinsic value analysis and monitoring sector trends to identify attractive entry points. Dollar-cost averaging and periodic portfolio reviews can help manage timing risk and capture long-term opportunities.