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Grab These 5 Mid-Cap Stocks to Strengthen Your Portfolio in Q4 2025
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Key Takeaways
Major U.S. stock indexes hover near record highs, while the S&P 400 mid-cap index is up 4.9% year to date.
Mid caps offer diversification, balancing growth potential and resilience against economic swings.
DDS, STRL, SNEX, AWI and WTS stand out with strong growth forecasts and favorable analyst estimates.
U.S. stock markets have been witnessing an astonishing bull run since the beginning of 2023 barring some minor fluctuations. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are currently rotating around their all-time highs.
The S&P 500 and the Nasdaq Composite have recorded several all-time highs in 2025. Meanwhile, the mid-cap benchmark — the S&P 400 index — is also up 4.9% year to date. The index is currently 4.6% away from its 52-week high posted on Nov. 25, 2024.
Investment in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine the attractive attributes of both small and large-cap stocks. Top-ranked, mid-cap stocks have a high potential to enhance their profitability, productivity and market share. These may also become large caps over time.
If economic growth slows down due to any unforeseen internal or external disturbance, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to their lower international exposure.
On the other hand, if the economy continues to thrive, these stocks will gain more than small caps due to established management teams, a broad distribution network, brand recognition and ready access to capital markets.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
Dillard's Inc.
Dillard's has been benefiting from its strategic efforts to capture growth in both its brick-and-mortar and e-commerce businesses. These initiatives are enhancing customer acquisition and retention, aided by store remodels, improved brand partnerships, and strong demand for activewear.
DDS’ focus on fashionable and exclusive merchandise continues to attract shoppers, while tight expense management contributed to better-than-expected earnings in the last reported quarter. DDS also stands out for its strong financial health, with solid liquidity, minimal rent obligations as it owns most of its real estate, and a healthy cash balance. Shareholder-friendly moves like steady dividends and buybacks reflect DDS’ strong confidence.
Dillard's has an expected revenue and earnings growth rate of -0.4% and -15.8%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the last 30 days.
Sterling Infrastructure Inc.
Sterling Infrastructure is engaged in the provision of e-infrastructure, transportation, and building solutions in the United States. STRL operates through three segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions.
STRL’s E-Infrastructure Solutions segment provides site development services for the blue-chip end users in the e-commerce distribution center, data center, manufacturing, warehousing, and power generation sectors.
STRL’s Transportation Solutions segment is involved in the development of infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail, and storm drainage systems for the departments of transportation, regional transit, airport, port, water, and railroads authorities.
STRL’s Building Solutions segment provides residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work for developers and general contractors, as well as plumbing and survey services for residential builds.
Sterling Infrastructure has an expected revenue and earnings growth rate of 6.5% and 56.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the last seven days.
StoneX Group Inc.
StoneX Group operates as a global financial services network that connects companies, organizations, traders, and investors to the market ecosystem worldwide. SNEX operates through Commercial, Institutional, Retail, and Global Payments segments. SNEX through its subsidiaries, offers execution, post-trade settlement, clearing and custody services.
StoneX Group has an expected revenue and earnings growth rate of 4.9% and 21.7%, respectively, for the next year (ending September 2026). The Zacks Consensus Estimate for next-year earnings has improved 21.7% over the last 60 days.
Armstrong World Industries Inc.
Armstrong World Industries is a leading global producer of ceiling systems for use primarily in the construction and renovation of commercial, institutional and residential buildings. AWI designs, manufactures and sells ceiling systems (primarily mineral fiber, fiberglass wool, metal, wood, wood fiber, glass-reinforced-gypsum and felt) globally.
AWI currently operates in three reporting segments — Mineral Fiber, Architectural Specialties and Unallocated Corporate. Mineral Fiber produces suspended mineral fiber and soft fiber ceiling systems for use in commercial and residential settings. Architectural Specialties produces and sources ceilings and walls for use in commercial settings.
AWI’s Unallocated Corporate contains cash, debt, a fully-funded U.S. pension plan and certain other miscellaneous balance-sheet items. Also, it includes all assets, liabilities, income and expenses that were formerly reported in the EMEA and Pacific Rim segments.
Armstrong World Industries has an expected revenue and earnings growth rate of 12.2% and 15.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
Watts Water Technologies Inc.
Watts Water Technologies designs, manufactures and sells various water safety and flow control products to promote safety, energy efficiency, and water conservation for commercial and residential buildings. WTS reports its business under three geographic segments: The Americas, Europe and APMEA, which consists of Asia-Pacific, the Middle East and Africa.
WTS classifies its wide range of products under four universal product lines — residential & commercial flow control products, HVAC (heating, ventilation and air conditioning) & gas products, drainage & water re-use products and water quality products.
WTI’s products are sold to plumbing, heating and mechanical wholesale distributors and dealers, original equipment manufacturers, specialty product distributors, and major do-it-yourself and retail chains.
Watts Water Technologies has an expected revenue and earnings growth rate of 3.9% and 11.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last seven days.
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Grab These 5 Mid-Cap Stocks to Strengthen Your Portfolio in Q4 2025
Key Takeaways
U.S. stock markets have been witnessing an astonishing bull run since the beginning of 2023 barring some minor fluctuations. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are currently rotating around their all-time highs.
The S&P 500 and the Nasdaq Composite have recorded several all-time highs in 2025. Meanwhile, the mid-cap benchmark — the S&P 400 index — is also up 4.9% year to date. The index is currently 4.6% away from its 52-week high posted on Nov. 25, 2024.
Investment in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine the attractive attributes of both small and large-cap stocks. Top-ranked, mid-cap stocks have a high potential to enhance their profitability, productivity and market share. These may also become large caps over time.
If economic growth slows down due to any unforeseen internal or external disturbance, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to their lower international exposure.
On the other hand, if the economy continues to thrive, these stocks will gain more than small caps due to established management teams, a broad distribution network, brand recognition and ready access to capital markets.
Here, we recommend five mid-cap stocks with a favorable Zacks Rank for the rest of 2025. These are: Dillard's Inc. (DDS - Free Report) , Sterling Infrastructure Inc. (STRL - Free Report) , StoneX Group Inc. (SNEX - Free Report) , Armstrong World Industries Inc. (AWI - Free Report) and Watts Water Technologies Inc. (WTS - Free Report) . Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
Dillard's Inc.
Dillard's has been benefiting from its strategic efforts to capture growth in both its brick-and-mortar and e-commerce businesses. These initiatives are enhancing customer acquisition and retention, aided by store remodels, improved brand partnerships, and strong demand for activewear.
DDS’ focus on fashionable and exclusive merchandise continues to attract shoppers, while tight expense management contributed to better-than-expected earnings in the last reported quarter. DDS also stands out for its strong financial health, with solid liquidity, minimal rent obligations as it owns most of its real estate, and a healthy cash balance. Shareholder-friendly moves like steady dividends and buybacks reflect DDS’ strong confidence.
Dillard's has an expected revenue and earnings growth rate of -0.4% and -15.8%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the last 30 days.
Sterling Infrastructure Inc.
Sterling Infrastructure is engaged in the provision of e-infrastructure, transportation, and building solutions in the United States. STRL operates through three segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions.
STRL’s E-Infrastructure Solutions segment provides site development services for the blue-chip end users in the e-commerce distribution center, data center, manufacturing, warehousing, and power generation sectors.
STRL’s Transportation Solutions segment is involved in the development of infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail, and storm drainage systems for the departments of transportation, regional transit, airport, port, water, and railroads authorities.
STRL’s Building Solutions segment provides residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work for developers and general contractors, as well as plumbing and survey services for residential builds.
Sterling Infrastructure has an expected revenue and earnings growth rate of 6.5% and 56.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the last seven days.
StoneX Group Inc.
StoneX Group operates as a global financial services network that connects companies, organizations, traders, and investors to the market ecosystem worldwide. SNEX operates through Commercial, Institutional, Retail, and Global Payments segments. SNEX through its subsidiaries, offers execution, post-trade settlement, clearing and custody services.
StoneX Group has an expected revenue and earnings growth rate of 4.9% and 21.7%, respectively, for the next year (ending September 2026). The Zacks Consensus Estimate for next-year earnings has improved 21.7% over the last 60 days.
Armstrong World Industries Inc.
Armstrong World Industries is a leading global producer of ceiling systems for use primarily in the construction and renovation of commercial, institutional and residential buildings. AWI designs, manufactures and sells ceiling systems (primarily mineral fiber, fiberglass wool, metal, wood, wood fiber, glass-reinforced-gypsum and felt) globally.
AWI currently operates in three reporting segments — Mineral Fiber, Architectural Specialties and Unallocated Corporate. Mineral Fiber produces suspended mineral fiber and soft fiber ceiling systems for use in commercial and residential settings. Architectural Specialties produces and sources ceilings and walls for use in commercial settings.
AWI’s Unallocated Corporate contains cash, debt, a fully-funded U.S. pension plan and certain other miscellaneous balance-sheet items. Also, it includes all assets, liabilities, income and expenses that were formerly reported in the EMEA and Pacific Rim segments.
Armstrong World Industries has an expected revenue and earnings growth rate of 12.2% and 15.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
Watts Water Technologies Inc.
Watts Water Technologies designs, manufactures and sells various water safety and flow control products to promote safety, energy efficiency, and water conservation for commercial and residential buildings. WTS reports its business under three geographic segments: The Americas, Europe and APMEA, which consists of Asia-Pacific, the Middle East and Africa.
WTS classifies its wide range of products under four universal product lines — residential & commercial flow control products, HVAC (heating, ventilation and air conditioning) & gas products, drainage & water re-use products and water quality products.
WTI’s products are sold to plumbing, heating and mechanical wholesale distributors and dealers, original equipment manufacturers, specialty product distributors, and major do-it-yourself and retail chains.
Watts Water Technologies has an expected revenue and earnings growth rate of 3.9% and 11.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last seven days.