Comparing Caterpillar, ITW, and American Water Works: Which Dividend Stock is the Best Pick for 2024?

Top Dividend Stocks for 2024: Caterpillar vs. ITW vs. American Water Works

Some records are meant to be broken. While the market seems to be led by growth stocks, a look at sector performance tells a different story. There are 11 sectors in the S&P 500, but only four are outperforming the benchmark year to date. One of them is the industrial sector, up more than 10% so far this year.

Caterpillar (NYSE: CAT)

Investors expect Caterpillar's earnings growth to maintain momentum this year: The construction, mining, transportation, energy, and infrastructure equipment company had an outstanding 2023, reporting record sales, adjusted operating profit, and profit per share. In addition, its free cash flow of $10 billion came in at the high end of management's (upwardly revised) target range of $5 billion to $10 billion.

Illinois Tool Works (NYSE: ITW)

A well-deserved all-time high: Plastered on the company's investor relations home page are clearly stated 2030 goals -- namely a 30% operating margin. The company continues to make progress toward that target. ITW is guiding for a 25.5% to 26.5% operating margin in 2024, along with a 5% increase in generally accepted accounting principles (GAAP) earnings per share (EPS) at the midpoint of the forecast.

American Water Works (NYSE: AWK)

American Water Works continues to grow through acquisition: Shares of American Water Works, a leading water utility, have ebbed recently, but that's not to say that the tide won't flow back in. Over the long term, American Water Works has proven to be a winner for shareholders, outperforming the market.