7 Most Profitable Mid-Cap Stocks To Invest In

2. Woodward Inc. (NASDAQ:WWD)

TTM Net Income: $372.33 Million

5-Year Net Income CAGR: 6.85%

Market Capitalization: $9.52 Billion

Number of Hedge Fund Holders: 41

Woodward Inc. (NASDAQ:WWD) is an American company specializing in the design, manufacture, and service of control systems and components for aerospace and industrial markets. The company provides innovative solutions for aircraft engines, industrial engines, turbines, and power generation equipment. Its advanced technologies include fluid, combustion, electrical, propulsion, and motion control systems, which are crucial for optimizing efficiency in various applications.

The company is strategically positioning itself for future growth through significant investments in research and development, particularly in the aerospace sector. Recently, Woodward Inc. (NASDAQ:WWD) was selected by Boeing to design advanced hydraulic controls for the X 66. This project is a collaboration between Boeing and NASA aimed at innovating a low-drag configuration to reduce fuel burn and emissions in single-aisle aircraft design.

Additionally, Woodward Inc. (NASDAQ:WWD) is investing in the development of alternative fuel technologies, particularly through its focus on Power-to-X (P2X) fuels like hydrogen, ammonia, and methanol. These fuels are being explored for various applications as part of the global effort to meet ambitious carbon reduction targets in aviation and transportation. To support this initiative, the company has established a P2X Research Center in Stuttgart, Germany, where it is testing components compatible with hydrogen for the Airbus Zero-E hydrogen-powered aircraft demonstrator. The company is looking to pioneer an advanced fuel control system for the next generation of aircraft engines.

In the third quarter of 2024, Woodward Inc. (NASDAQ:WWD) reported net sales of $848 million, up from $801 million, representing a 6% increase. The company’s net earnings also rose to $102 million, or $1.63 per share, compared to $85 million, or $1.37 per share in the same period last year. For the first three quarters of fiscal 2024, the company generated free cash flow of $225 million, a significant increase from $98 million during the same period last year.

Over the past 5 years, Woodward Inc. (NASDAQ:WWD) has grown its net income at a compound annual growth rate (CAGR) of 6.85%, while its levered free cash flow has increased at a CAGR of 13.44% during the same period. WWD ranks second on our list of the 7 most profitable mid-cap stocks to invest in.

As of the second quarter of 2024, WWD was held by 41 hedge funds, according to Insider Monkey’s database.