12 Best Large Cap Stocks To Buy Now

6. Eaton Corporation (NYSE:ETN)

Market Capitalization as of September 13: $123.04 billion

Number of Hedge Fund Holders: 93

Eaton Corporation (NYSE:ETN) is a multinational power management company that offers a wide range of products and services, including power distribution, circuit protection, motor control, and energy storage, to improve energy efficiency, reduce costs, and enhance safety. It has ~ 85,000 employees and sells products to customers in 175 countries.

The backlog for the electrical segment of the business has surged to over $11 billion, a 4x increase from pre-COVID levels. It continues to impress investors with robust organic sales growth, expanding margins, and exceptional free cash flow generation. 93 hedge funds hold long positions in the company, as of June 30.

The data center and power generation/renewable projects take the lead in new project announcements, with these 2 project types representing ~40% of the announced projects in the last 12 months. The company now has 444 projects worth $1.4 trillion cumulatively. This is a 2x increase from last year, and the backlog for mega projects (announced value of $1 billion+) now stands at $1.6 trillion, up ~25%.

Revenue was $6.35 billion in the second quarter of 2024. This amount exhibited an 8.35% improvement from Q2 in the prior year. Electrical orders were up 9% and aerospace orders increased by 4%. The earnings per share were $2.73, an all-time record and up 24% year-over-year.

CEO Craig Arnold stated that the company anticipates significant growth in AI data centers, noting that currently only 5-10% of large businesses’ capital expenditures are allocated to AI data centers. Arnold emphasized that the backlog of data center construction, exceeding $140 billion, represents 8 years of business that Eaton Corporation (NYSE:ETN) is well-positioned to capitalize on in the near term. This makes it one of the top large-cap stocks to buy now.

Ave Maria World Equity Fund stated the following regarding Eaton Corporation plc (NYSE:ETN)  in its first quarter 2024 investor letter:

“Eaton Corporation plc (NYSE:ETN) is an intelligent power management company. The company is a long-term beneficiary in the trend towards electrification, energy transition and digitalization. Eaton is also benefiting from unprecedented global stimuli such as the Inflation Reduction Act, Infrastructure Investment and Jobs Act, the Chips and Science Act and the EU recovery plan known as the NextGenerationEU.”