Industrial Winners Using the Aluminum Formula: Three Sector Plays for 2026

Zacks Investment Research recently highlighted three industrial stocks commanding investor attention as the sector builds momentum heading into spring 2026. This selection follows a methodical framework—what we can call the aluminum formula—that combines valuation strength, growth potential, and market timing into a disciplined stock-picking approach. Kaiser Aluminum Corp. (KALU), The Gorman-Rupp Co. (GRC), and Century Aluminum Co. (CENX) emerge as the standout picks within a broader industrial rally.

Why Aluminum Stocks Are Leading the Industrial Rally

The industrial sector kicked off 2026 on strong footing. The State Street Industrial Select Sector SPDR ETF (XLI) has surged 12.8% year to date, reflecting broad-based resilience across aerospace, machinery, transportation, and construction. Yet aluminum-related businesses deserve special attention within this story.

Manufacturing activity in the U.S. has steadied after a tumultuous 2025. New orders and capital spending intentions—the true barometers of economic confidence—have stabilized meaningfully. Input costs are easing, supply chains are operating more smoothly, and profit margins for industrial manufacturers are expanding. Meanwhile, steady infrastructure spending and government-backed projects continue providing reliable demand. Defense and aerospace spending remain robust, commercial aviation is normalizing, and freight volumes are ticking upward globally. With interest rates potentially moderating through the year, companies in capital-intensive industries could see equipment purchase cycles accelerate.

The Aluminum Formula: A Selection Framework

The three stocks selected here follow a rigorous screening process that combines three key metrics into what Zacks calls the aluminum formula. Specifically, the approach blends Value, Growth, and Momentum (VGM) into a composite score, then cross-references each candidate against the Zacks Rank system—which identifies stocks most likely to outperform the broader market.

The stocks highlighted today carry either a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) designation. Each also posts a VGM Score of A or B, meaning each excels in at least two of the three dimensions: relative valuation, earnings growth trajectory, and technical momentum.

Kaiser Aluminum Corp.: Specialty Products, Explosive Growth

Kaiser Aluminum operates as a semi-fabricated specialty aluminum mill products company, serving diverse end markets where precision and customization command premium pricing. The aluminum formula reveals why KALU stands out: it carries a Zacks Rank #1 rating with a VGM Score of A.

The numbers are compelling. KALU’s expected earnings growth rate for the current year stands at 142.6%—a figure that dwarfs broader industrial average. Adding to the bullish case, the Zacks Consensus Estimate for current-year earnings has climbed 3.8% over just the past 60 days, signaling that professional analysts are revising expectations upward as fresh data emerges.

Century Aluminum Company: The Outlier on the Growth Spectrum

Century Aluminum operates primary aluminum smelters across the United States and Iceland, with related operations in carbon anode production and alumina mining and refining. The company represents the aluminum formula in its most aggressive form: a Zacks Rank #1 designation paired with a VGM Score of A.

CENX is the standout growth story among the trio. The expected earnings growth rate for the next 12 months is projected at 312.3%—an extraordinary figure that reflects both a recovery cycle and renewed market confidence in the metal’s demand. Even more striking, the Zacks Consensus Estimate for next-year earnings has surged 42.1% over the past 60 days alone. This velocity of analyst revisions suggests sentiment is turning decisively favorable.

The Gorman-Rupp Co.: Steady Cycle Play

The Gorman-Rupp Company designs, manufactures, and markets pumping systems deployed globally across water, wastewater, industrial, construction, municipal, petroleum, and fluid-handling applications. GRC carries a Zacks Rank #2 (Buy) designation with a VGM Score of B—a profile reflecting a more moderate growth tempo alongside solid value credentials.

Expected earnings growth for the current year is 8.4%, a steady if unspectacular figure. However, the Zacks Consensus Estimate for current-year earnings has risen 3.1% over the past 60 days, indicating that this classic industrial play remains on the radar of professional research teams tracking the economic cycle.

How the Aluminum Formula Outperforms

Since 2000, investment strategies grounded in rigorous screening frameworks similar to the aluminum formula have delivered exceptional risk-adjusted returns. Zacks’ top stock-picking approaches have averaged annual gains of 48.4%, 50.2%, and 56.7%—well ahead of the S&P 500’s historical +7.7% average annual return. Past performance does not guarantee future results, yet the methodology speaks to the power of combining quantitative discipline with market timing acumen.

The industrial sector shows signs of entering a genuinely constructive phase: economic visibility is improving, capital spending intentions are stabilizing, and margin expansion is underway. As long as these conditions hold, cyclical businesses—particularly those serving manufacturing, infrastructure, and defense—should retain the upper hand in portfolio allocations. Kaiser Aluminum, Century Aluminum, and The Gorman-Rupp Co. represent three variations on this aluminum formula, each offering a different risk-return profile within the same favorable industrial backdrop.

Important Disclosures

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. All information is current as of March 3, 2026, and is subject to change without notice. Returns referenced are hypothetical and based on monthly rebalanced portfolios of stocks with Zacks Rank = 1, with zero transaction costs. These are not actual portfolio returns. The S&P 500 is an unmanaged index. For full performance disclosures, visit Zacks Investment Research’s website.