Top Stock Picks for Week of March 25, 2024
Caterpillar (CAT), known for its iconic yellow machines, is the largest global construction and mining equipment manufacturer. Caterpillar’s revenues and earnings have grown year over year for twelve straight quarters thanks to its cost-saving actions, strong end-market demand and pricing actions, which offset the impact of the supply-chain snarls and cost pressures. The Construction Industries segment is expected to benefit from the rising construction activities in the United States and other parts of the world. Backed by demand for commodities fueled by the energy-transition trend, a thriving mining sector will aid the Resource Industries segment. The Energy & Transportation segment remains well-poised for growth, backed by strong demand across all applications. Its dividend yield and payout ratio are higher than its peers. A strong liquidity position, investments in expanding services and digital initiatives will help Caterpillar deliver outsized returns. Caterpillar is one of the stocks most watched by Zacks.com visitors lately.
Cadence Design Systems Inc (CDNS) is a leader in electronic system design space.Cadence’s performance is gaining from robust customer demand. The company ended 2023 with a backlog of $6 billion and current remaining performance obligations of $3.2 billion. Accelerated design activity owing to transformative generational trends such as generative AI, hyperscale computing, 5G and autonomous driving is likely to boost the top line going ahead. Momentum in 3D-IC and chiplet designs bodes well. Expansion of its well-established partnerships with strategic partners like NVIDIA, Arm and Intel is a tailwind. Revenues for 2024 are now projected in the range of $4.55-$4.61 billion. A strong cash balance can help the company to pursue strategic acquisitions and other investments in growth initiatives. Notably, Cadence has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Caterpillar Inc. (CAT) : Free Stock Analysis Report
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
