2. A caterpillar Caterpillar (NYSE: CAT) makes construction, mining, diesel and gas engines, turbines, and locomotives for the construction, resource, and energy & transportation industries. The company's share price hit a record high after reporting strong 2023 earnings.
Revenue climbed 12.8% to $67.1 billion, and operating income rose 64% to $13 billion. Annual net income rose 54.1% to $10.3 billion. After three decades of dividend increases, Caterpillar declared a quarterly dividend of $1.30 per share, its highest year in 98 years.
Caterpillar's top and bottom lines have grown steadily, with sales rising from $51 billion in 2021 to $67.1 billion in 2023 and net income rising from $6.5 billion to $10.3 billion. From 2021 to 2023, diluted EPS doubled from $11.83 to $20.12. Free cash flow was stable across all three years, from $4.7 billion in 2021 to $9.8 billion in 2023.
Caterpillar expects an operating margin at the top of its range in 2024 as prices rise above manufacturing expenses. The company's pricing strength shows its capacity to retain sales volume while raising prices to beat inflation. Caterpillar expects $28 billion in services revenue by 2026. Investors should recognize Caterpillar's cyclical revenue and earnings.
The heavy equipment producer does well when the economy improves because building and infrastructure demand rise. Demand may plummet during a downturn as clients cut expenditure and delay projects. Despite cyclicality, Caterpillar is a good company to hold because its revenue and earnings have increased, demonstrating its dominance and pricing power
3. Ulta Beauty At 1,385 retail outlets in 50 states as of March 14, Ulta Beauty (NASDAQ: ULTA) is the largest specialized beauty retailer for cosmetics, perfumes, skincare, and hair care. The retailer's fiscal 2023 revenue rose 9.8% to $11.2 billion. Net income rose 4% to $1.3 billion and operating income 2.4% to $1.7 billion. Ulta Beauty was $1 billion positive in free cash flow for the fiscal year.
The firm opened 30 locations in fiscal 2023, completing a strong year. Sales and profitability have increased for Ulta Beauty over the past three fiscal years. Sales climbed from $6.2 billion in 2020 to $10.2 billion in 2022, and net income rose from $176 million to $1.2 billion. All three fiscal years, the cosmetics specialist earned positive free cash flow of $905 million
These data demonstrate Ulta Beauty's franchise strength and membership growth. Its loyalty program had 40 million members in fiscal 2022, accounting for 95% of sales, up from 32 million in fiscal 2018. In 2022, Euromonitor assessed the U.S. beauty goods industry at $104 billion, suggesting Ulta Beauty has opportunity to grow in this big yet fragmented market.
Ulta Beauty expects comparable sales to climb 4% to 5% in fiscal 2024 and to open 60 to 65 net new shops. Ulta Beauty's omnichannel products serve a wide range of customers at different price points, ensuring continuous growth for investors.
stay turned for development