4 Electronics Manufacturing Leaders Worth Adding to Your Watch List

When scanning the electronics manufacturing sector, four companies stand out for their ability to navigate current market dynamics while capitalizing on emerging opportunities. Powell Industries, Inc. (POWL), Emerson Electric Co. (EMR), Eaton Corporation plc (ETN), and EnerSys (ENS) each demonstrate distinct competitive advantages that merit closer attention from investors seeking exposure to this critical industrial segment.

Why These Four Manufacturing Companies Matter Right Now

The electronics manufacturing landscape is experiencing a fascinating divergence. On one hand, businesses that have modernized their operations are pulling further ahead. Companies investing in digitalization, supply-chain optimization, and advanced production technologies are discovering significant competitive edges. Meanwhile, firms stuck with legacy systems are struggling against persistent headwinds.

What’s particularly interesting is how selective demand has become. While the broader manufacturing sector contracted for ten consecutive months through December 2025, certain end markets—particularly aerospace, defense, medical equipment, and data centers—have maintained healthy order flows. This creates opportunities for nimble manufacturers positioned in the right niches.

The Four Electronics Manufacturing Stocks Deserve Your Attention

Powell Industries (POWL) operates from Houston, focusing on custom-engineered systems for electrical distribution, control and monitoring applications. The company has benefited significantly from robust project activity in utility and industrial markets. More intriguingly, energy transition initiatives—including biofuels, carbon capture, and hydrogen projects—are reshaping its growth profile. Up 55.2% over the past year and beating earnings estimates consistently (average surprise of 8.4%), Powell carries a Zacks Rank #2 designation.

Emerson Electric (EMR) presents a different profile as a diversified global technology player. Its strength emerges across multiple business units: Final Control is riding power market momentum, while Measurement & Analytical benefits from robust regional expansion in the Americas and Asia-Pacific. The Control Systems & Software division maintains solid footing through power and process end-market demand. With an 18.9% annual return and Zacks Rank #3 status, Emerson demonstrates the stability that comes from diversification.

Eaton Corporation (ETN), headquartered in Dublin, commands attention through its leadership in electrical components and power management systems. The company’s exposure to artificial intelligence-driven data center buildouts provides meaningful tailwinds. Additionally, global reindustrialization trends are creating fresh demand vectors. Though down 3.7% annually, recent momentum (up 5.6% in the past month) suggests the market is recognizing its recovery potential.

EnerSys (ENS) specializes in industrial batteries with particularly strong positioning in aerospace and defense markets. The expansion of U.S. communications networks, driven by data center demand, is simultaneously boosting its Energy Systems segment. The company has consistently beaten quarterly estimates (4.9% average surprise), with shares up 19.2% year-over-year.

Understanding the Industry Backdrop

To appreciate why these four companies warrant monitoring, it’s essential to understand the broader context. The Zacks Manufacturing-Electronics industry, ranked #52 out of 243 industries, places itself in the top 22%—a distinction that typically correlates with outperformance potential. Historically, industries in the top 50% of Zacks rankings outperform the bottom 50% by more than a two-to-one margin.

However, this isn’t a sector without complications. Manufacturing activity data, measured through the Purchasing Manager’s Index (PMI), fell to 47.9% in December—below the 50% threshold indicating contraction. The New Orders Index similarly contracted at 47.7%, while supplier delivery delays persisted. These headwinds matter, particularly regarding component availability.

Yet this is precisely where stock-picking skill becomes valuable. Not all manufacturers are created equal. Those with diversified customer bases, modern operations, and exposure to growth markets are differentiating themselves clearly from their peers.

Valuation Context Matters

The industry currently trades at 22.27X forward P/E—elevated relative to the sector’s 21.68X but slightly discounted to the S&P 500’s 23.38X. This valuation sits comfortably within the five-year range (14.48X low to 25.64X high) and near the median of 20.99X, suggesting fair—if not bargain—pricing.

Over the past year, the Manufacturing-Electronics industry returned 5.4%, underperforming both its sector (+10.3%) and the S&P 500 (+19.4%). This underperformance creates an interesting opportunity thesis: if manufacturing stabilizes and these companies execute, catch-up potential exists.

What Drives Success in This Sector

Three factors are reshaping manufacturing electronics success in 2025. First, companies maintaining strength in electronics services—through advanced manufacturing technology adoption and integration of sophisticated components—are sustaining momentum even as overall manufacturing weakens. Second, digitalization continues delivering tangible competitive advantages, with companies gaining real-time visibility into operations, demand patterns, and supply-chain performance. Third, specialized exposure to thriving end markets like medical devices, aerospace, defense, and AI-related infrastructure is proving decisive.

The e-commerce boom simultaneously creates favorable conditions for manufacturers serving logistics and automation applications. These trends aren’t temporary—they reflect structural shifts in how global manufacturing operates and where capital is being deployed.

Final Thoughts

While manufacturing sector headwinds persist, the divergence between well-positioned and poorly-positioned manufacturers has never been starker. Powell Industries, Emerson Electric, Eaton Corporation, and EnerSys each represent different approaches to capturing value in this evolving landscape. Whether you’re drawn to Powell’s energy transition positioning, Emerson’s diversification, Eaton’s AI exposure, or EnerSys’s aerospace-defense dominance, each warrants inclusion on your watchlist as the sector potentially turns a corner.