10 Best Performing Dow Stocks in 2024

05. Caterpillar Inc. (NYSE:CAT)

Year to date Share Price Gain: 27.93%

Number of Hedge Fund Holders: 49

Caterpillar Inc. (NYSE:CAT) has shown a strong performance in 2024, with the stock gaining 27.93% year-to-date. The company recently reported its Q2 2024 earnings, beating market expectations. Caterpillar Inc. (NYSE:CAT) EPS came in at $5.99, exceeding analysts’ estimates of $5.56. Moreover, the number of hedge fund holders in Q2 2024 increased to 49, compared to 45 in the previous quarter, indicating heightened investor interest.

Caterpillar Inc. (NYSE:CAT) robust earnings performance highlights its solid fundamentals and effective cost management strategy. Despite a 4% decline in sales and revenues compared to the previous year, the company managed to achieve a record adjusted operating profit of $3.7 billion, driven by its strong execution and diverse end-market exposure. The adjusted operating profit margin improved to 22.4%, up by 110 basis points from the same period last year. This improvement reflects Caterpillar Inc. (NYSE:CAT) ability to maintain profitability even in a challenging macroeconomic environment.

The company’s performance in the second quarter was bolstered by a strong showing in the Energy and Transportation segment, where sales to users increased by 10%, offsetting weakness in the Construction Industries and Resource Industries. Caterpillar’s backlog also grew to $28.6 billion, up by $700 million from Q1 2024, demonstrating sustained demand for its products and services.

Additionally, Caterpillar’s free cash flow for the quarter was a robust $2.5 billion. The company continued to focus on shareholder returns, repurchasing $1.8 billion worth of shares and distributing $600 million in dividends. Caterpillar’s recent authorization of an additional $20 billion share repurchase program, coupled with its 8% dividend increase, underscores its commitment to returning capital to shareholders.

The positive outlook for Caterpillar Inc. (NYSE:CAT) adjusted operating profit margins for the full year, anticipated to be above the target range, further solidifies its bullish stance. Continued investments in sustainability and new product initiatives, such as battery-electric mining trucks and hydrogen-powered solutions, position the company for long-term growth. Caterpillar Inc. (NYSE:CAT) strong financial metrics, increased profitability, and strategic focus on high-growth sectors make it a compelling choice for investors looking for stable performance among Dow stocks in 2024.