3. GE Aerospace (NYSE:GE)
Year-to-Date Return as of September 9: 62.6%
GE Aerospace (NYSE:GE) is an American aircraft engine supplier that offers products and services in aviation and defense engineering. The stock began the year under the name General Electric but has since been renamed GE Aerospace. This name change followed the spin-off of GE Vernova in early April. This successful spin-off attracted investors’ attention and as a result, the stock surged by nearly 63% since the start of 2024.
Artisan Partners appreciated the company’s performance this year and highlighted this in its Q1 2024 investor letter:
“Our holdings in industrials, now our largest sector weighting, added to the portfolio’s outperformance as well. In particular, GE Aerospace (NYSE:GE) stood out as the largest contributor to relative performance this quarter. The storied American company and leader in aerospace, health care, renewable energy and power generation will split into three separate companies next quarter. We are most interested in its aerospace assets, given its growing pricing power in that industry. GE said it expects to increase deliveries of its popular LEAP airline engines by 20% to 25% this year given the escalating demand for air travel. The engine is manufactured by CFM International, a 50/50 joint venture between GE and Safran. Together, they make about 50% of the world’s commercial airline engines. In addition to strong fundamentals and pricing power in aerospace, we are attracted to GE’s clean hydrogen and decarbonization technologies in its alternative energy business, assets that are used to generate 30% of the world’s electricity.The unit benefits from the $435 billion in clean energy funding provided by the Inflation Reduction Act and Infrastructure Investment and Jobs Act.”
GE Aerospace (NYSE:GE)’s business remains robust following the spin-off. It is accelerating efforts and utilizing FLIGHT DECK to address supply constraints and fully meet customer demand. The leadership is confident that by advancing its strategic priorities for the present and future, the company will successfully meet customer needs and deliver significant value to shareholders. In the second quarter of 2024, the company reported revenue of $8.2 billion, which showed a 4% growth from the same period last year. Its total orders were worth $11.2 billion, which saw an 18% YoY growth.
GE Aerospace (NYSE:GE) had its cash well-positioned during Q2 2024. The company reported an operating cash flow of $1 billion and a free cash flow of $1.1 billion, up 27% and 17% on a YoY basis, respectively. The company initiated its quarterly dividends in April, offering a per-share dividend of $0.28. The stock supports a dividend yield of 0.67%, as of September 9.
Insider Monkey’s database of Q2 2024 indicated that 86 hedge funds held stakes in GE Aerospace (NYSE:GE), compared with 95 in the previous quarter. These stakes have a consolidated value of over $12 billion. With over 48 million shares, TCI Fund Management was the company’s largest stakeholder in Q2.
