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4 Diversified Operations Stocks to Consider on Promising Industry Trends
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The Zacks Diversified Operations industry is benefiting from solid momentum in the manufacturing sector and strength across the aerospace and defense industries. Growth in commercial aviation and steady demand in the home and building product markets are key catalysts for the industry’s growth.
However, supply-chain issues have been weighing on the performance of some industry players. Grupo Cibest S.A. (CIB - Free Report) , POSCO Holdings Inc. (PKX - Free Report) , Griffon Corporation (GFF - Free Report) and GPGI, Inc. (GPGI - Free Report) are a few industry participants that are likely to capitalize on the opportunities.
About the Industry
The Zacks Diversified Operations industry includes companies that operate in various end markets, including oil & gas, industrial, electronics, power, aviation, technology, finance, healthcare, chemical, non-residential construction and transportation. Such companies manufacture and provide equipment and solutions, including bioprocessing products, molecular testing-related products, gas and steam turbines, generators, commercial jet engines and engineered fluid-process equipment. Industry players also provide related services to a large customer base. A few companies offer services in the agriculture, marine and telecommunications markets and are engaged in providing environmental and safety solutions. The diversified market operators have a vast global presence, with exposure in the United States, Japan, India, China, Canada and other countries.
Major Trends Shaping the Future of the Diversified Operations Industry
Strength in the Manufacturing Sector: The industry has been benefiting from an increase in manufacturing activities. After witnessing a contraction in economic activities for 10 successive months till December 2025, the manufacturing sector expanded for the eighth consecutive month in August. Per the Institute for Supply Management’s (ISM) report, the Manufacturing Purchasing Manager’s Index touched 54.6% in August. A figure more than 50% indicates an expansion in manufacturing activity. Also, the New Orders Index expanded, registering 53.7% in the same month.
Robust Aerospace and Defense Markets: The prospects of multi-sector companies primarily depend on the operating conditions of several end markets. Some factors that currently favor the industry are healthy demand from the aerospace, defense and governmental sectors and infrastructure development. Industry players with exposure to the commercial aviation markets are poised to gain from healthy growth in air transport flight hours. Also, solid demand for several products and equipment in the consumer and professional, and home and building product markets bodes well for some industry participants.
Investments in Innovation & Technological Advancements: The industry participants’ constant focus on innovation, product upgrades and the development of new products to stay competitive in the market should drive growth. With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. Digitization enables industry participants to boost their competitiveness through enhanced operational productivity, product quality and better cost management.
Supply-Chain Disruptions: Supply-chain disruptions, especially related to the availability of electrical and electronic components, have been concerning for industry participants of late. The latest ISM report’s Supplier Deliveries Index reflects slower deliveries for the ninth straight month in August. Supply-chain issues, if not controlled, might hinder the growth of diversified operations companies going forward.
Zacks Industry Rank Suggests Strong Prospects
The Zacks Diversified Operations industry, housed within the broader Zacks Conglomerates sector, currently carries a Zacks Industry Rank #59. This rank places it in the top 24% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates robust prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Given the bullish near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. However, it is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Lags the S&P 500
In the past year, the Zacks Diversified Operations industry has underperformed the S&P 500 composite. The industry has declined 28.2% against the S&P 500 Index’s 16.5% rise.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward P/E (F12M), which is a commonly used multiple for valuing diversified operations stocks, the industry is currently trading at 14.54X compared with the S&P 500’s 19.84X.
Over the past five years, the industry has traded as high as 16.01X and as low as 9.98X, with a median of 13.97X, as the chart below shows:
Price-to-Earnings Ratio Versus S&P 500
4 Diversified Operations Stocks Leading the Pack
Grupo Cibest: Based in Colombia, the company provides money market accounts, checking and savings accounts, fixed-term deposits, time deposits and investment products. CIB is benefiting from the positive trend in its mortgage loan portfolio, driven by strong growth in Colombia. Also, growth in savings accounts, supported by the robust performance of the institutional (corporate) segment, bodes well for the company.
Shares of this Zacks Rank #1 (Strong Buy) company have soared 96.9% in the past year. Its earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters while missing in the other two, the average surprise being 12.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: CIB
POSCO: Based in Seoul, South Korea, POSCO manufactures and markets a wide range of steel products, including hot-rolled sheets, plates, wire rods, cold-rolled sheets, galvanized sheets and stainless steel globally. The company stands to gain from its strategy to build an integrated rare earth supply chain through POSCO International, expanding into sourcing, refining and permanent magnet production for EVs. PKX has unveiled a long-term strategy to diversify beyond steel by expanding into lithium, strategic minerals and energy, targeting KRW 187 trillion in revenues by 2035.
Shares of this Zacks Rank #1 company have soared 10.1% in the past year. In the last reported quarter, the company reported earnings of $1.30 per share, which surpassed the Zacks Consensus Estimate of 85 cents.
Price and Consensus: PKX
Griffon: Based in New York, Griffon engages in the manufacture and sale of a broad range of consumer, professional, home and building products, including garage doors, shutters, home organization products and outdoor living products. GFF is benefiting from favorable trends across its Clopay operations, with residential and commercial demand supporting growth. Favorable price and mix, along with higher residential volumes, also remain supportive of the company’s performance.
The Zacks Rank #2 (Buy) company’s shares surged 21.8% in the past year. GFF delivered better-than-expected results in three of the trailing four quarters while missing the mark in one, the average surprise being 6.6%.
Price and Consensus: GFF
GPGI: Based in Saint Somerset, NJ, GPGI provides metal payment cards, secure authentication solutions and engineered injection molding equipment and aftermarket services for the food, packaging, medical and consumer products markets worldwide. The company is benefiting from its diversified portfolio, with market-leading business CompoSecure driving growth. Solid momentum in the Husky business also bodes well.
This Zacks Rank #2 company reported earnings of 17 cents per share, which surpassed the Zacks Consensus Estimate of 14 cents.
View the Zacks #1 Rank List
Image: Bigstock
4 Diversified Operations Stocks to Consider on Promising Industry Trends
The Zacks Diversified Operations industry is benefiting from solid momentum in the manufacturing sector and strength across the aerospace and defense industries. Growth in commercial aviation and steady demand in the home and building product markets are key catalysts for the industry’s growth.
However, supply-chain issues have been weighing on the performance of some industry players. Grupo Cibest S.A. (CIB - Free Report) , POSCO Holdings Inc. (PKX - Free Report) , Griffon Corporation (GFF - Free Report) and GPGI, Inc. (GPGI - Free Report) are a few industry participants that are likely to capitalize on the opportunities.
About the Industry
The Zacks Diversified Operations industry includes companies that operate in various end markets, including oil & gas, industrial, electronics, power, aviation, technology, finance, healthcare, chemical, non-residential construction and transportation. Such companies manufacture and provide equipment and solutions, including bioprocessing products, molecular testing-related products, gas and steam turbines, generators, commercial jet engines and engineered fluid-process equipment. Industry players also provide related services to a large customer base. A few companies offer services in the agriculture, marine and telecommunications markets and are engaged in providing environmental and safety solutions. The diversified market operators have a vast global presence, with exposure in the United States, Japan, India, China, Canada and other countries.
Major Trends Shaping the Future of the Diversified Operations Industry
Strength in the Manufacturing Sector: The industry has been benefiting from an increase in manufacturing activities. After witnessing a contraction in economic activities for 10 successive months till December 2025, the manufacturing sector expanded for the eighth consecutive month in August. Per the Institute for Supply Management’s (ISM) report, the Manufacturing Purchasing Manager’s Index touched 54.6% in August. A figure more than 50% indicates an expansion in manufacturing activity. Also, the New Orders Index expanded, registering 53.7% in the same month.
Robust Aerospace and Defense Markets: The prospects of multi-sector companies primarily depend on the operating conditions of several end markets. Some factors that currently favor the industry are healthy demand from the aerospace, defense and governmental sectors and infrastructure development. Industry players with exposure to the commercial aviation markets are poised to gain from healthy growth in air transport flight hours. Also, solid demand for several products and equipment in the consumer and professional, and home and building product markets bodes well for some industry participants.
Investments in Innovation & Technological Advancements: The industry participants’ constant focus on innovation, product upgrades and the development of new products to stay competitive in the market should drive growth. With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. Digitization enables industry participants to boost their competitiveness through enhanced operational productivity, product quality and better cost management.
Supply-Chain Disruptions: Supply-chain disruptions, especially related to the availability of electrical and electronic components, have been concerning for industry participants of late. The latest ISM report’s Supplier Deliveries Index reflects slower deliveries for the ninth straight month in August. Supply-chain issues, if not controlled, might hinder the growth of diversified operations companies going forward.
Zacks Industry Rank Suggests Strong Prospects
The Zacks Diversified Operations industry, housed within the broader Zacks Conglomerates sector, currently carries a Zacks Industry Rank #59. This rank places it in the top 24% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates robust prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Given the bullish near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. However, it is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Lags the S&P 500
In the past year, the Zacks Diversified Operations industry has underperformed the S&P 500 composite. The industry has declined 28.2% against the S&P 500 Index’s 16.5% rise.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward P/E (F12M), which is a commonly used multiple for valuing diversified operations stocks, the industry is currently trading at 14.54X compared with the S&P 500’s 19.84X.
Over the past five years, the industry has traded as high as 16.01X and as low as 9.98X, with a median of 13.97X, as the chart below shows:
Price-to-Earnings Ratio Versus S&P 500
4 Diversified Operations Stocks Leading the Pack
Grupo Cibest: Based in Colombia, the company provides money market accounts, checking and savings accounts, fixed-term deposits, time deposits and investment products. CIB is benefiting from the positive trend in its mortgage loan portfolio, driven by strong growth in Colombia. Also, growth in savings accounts, supported by the robust performance of the institutional (corporate) segment, bodes well for the company.
Shares of this Zacks Rank #1 (Strong Buy) company have soared 96.9% in the past year. Its earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters while missing in the other two, the average surprise being 12.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: CIB
POSCO: Based in Seoul, South Korea, POSCO manufactures and markets a wide range of steel products, including hot-rolled sheets, plates, wire rods, cold-rolled sheets, galvanized sheets and stainless steel globally. The company stands to gain from its strategy to build an integrated rare earth supply chain through POSCO International, expanding into sourcing, refining and permanent magnet production for EVs. PKX has unveiled a long-term strategy to diversify beyond steel by expanding into lithium, strategic minerals and energy, targeting KRW 187 trillion in revenues by 2035.
Shares of this Zacks Rank #1 company have soared 10.1% in the past year. In the last reported quarter, the company reported earnings of $1.30 per share, which surpassed the Zacks Consensus Estimate of 85 cents.
Price and Consensus: PKX
Griffon: Based in New York, Griffon engages in the manufacture and sale of a broad range of consumer, professional, home and building products, including garage doors, shutters, home organization products and outdoor living products. GFF is benefiting from favorable trends across its Clopay operations, with residential and commercial demand supporting growth. Favorable price and mix, along with higher residential volumes, also remain supportive of the company’s performance.
The Zacks Rank #2 (Buy) company’s shares surged 21.8% in the past year. GFF delivered better-than-expected results in three of the trailing four quarters while missing the mark in one, the average surprise being 6.6%.
Price and Consensus: GFF
GPGI: Based in Saint Somerset, NJ, GPGI provides metal payment cards, secure authentication solutions and engineered injection molding equipment and aftermarket services for the food, packaging, medical and consumer products markets worldwide. The company is benefiting from its diversified portfolio, with market-leading business CompoSecure driving growth. Solid momentum in the Husky business also bodes well.
This Zacks Rank #2 company reported earnings of 17 cents per share, which surpassed the Zacks Consensus Estimate of 14 cents.
Price and Consensus: GPGI