1. Eaton Corporation plc (NYSE:ETN)
Number of Hedge Fund Holders: 93
Joseph Eaton founded the company in 1911, first selling truck axles in New Jersey. Since then, Eaton Corporation plc (NYSE:ETN) has grown into a major industrial force, primarily through acquisitions in several end sectors. The two main categories of Eaton’s portfolio are its industrial and electrical operations. About 70% of the company’s revenue comes from its electrical portfolio, which offers parts for data centers, utilities, and residential and commercial structures. The remaining 30% comes from its industrial sector, which provides parts for passenger and commercial cars as well as airplanes.
Eaton Corporation plc (NYSE:ETN) produces highly engineered, mission-critical components that address client concerns in key infrastructure areas worldwide. Since a large percentage of Eaton Corporation plc (NYSE:ETN)’s products are integrated into client operations and require periodic maintenance or replacement, their profit margins are typically higher than those of the equipment’s sale. The company has one of the biggest installed bases of electrical equipment in the world, and its expansion is being fueled by factors like higher safety and efficiency regulations, reshoring supply chains in the US, and the explosion of data generation and energy use.
In Q3 2024, Eaton Corporation plc (NYSE:ETN) reported revenue of $6.3 billion, up 8% on both a total and organic basis. The company’s operating cash flow in Q3 2024 was $1.3 billion, up 15% from the year before, and its free cash flow was $1.1 billion, up 23% from the year before.
Eaton Corporation plc (NYSE:ETN) has given positive outlooks for the future, predicting an 18% increase in adjusted EPS to $10.75 to $10.81 in 2024. The business also anticipates double-digit market growth in 2025 for electric vehicles, data centers, and commercial aerospace.
To meet this demand, Eaton Corporation plc (NYSE:ETN) is making significant expenditures; production capacity investments now total $1.5 billion, up $500 million from earlier projections. A growing backlog, record financial performance, and targeted investments in high-growth industries position Eaton Corporation plc (NYSE:ETN) for solid expansion.
Thomas Bailard’s Bailard Inc. was the largest shareholder in the company among the funds in Insider Monkey’s database. It owns 56,541 shares worth $1.74 million as of Q2.
While we acknowledge the potential of Eaton Corporation plc (NYSE:ETN) as the best industrial stock, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ETN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. 10 Best Industrial Machinery Stocks to Buy Now is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
