This Industrial Stock Is Up 533% in 2 Years. I Predict It Will Join the Dow if Caterpillar Issues a Stock Split.
Artificial intelligence (AI) infrastructure spending is vaulting GE Vernova to new heights.
Overview
International Business Machines had its worst day in its history on July 14. So you may think that the blue chip dividend stock would drag down the Dow Jones Industrial Average, but that didn't happen. IBM has only a 2.3% weighting in the Dow, so its losses were more than offset by fellow Dow component Goldman Sachs, which has a 12.4% weighting and gained 9% that day.
This is just one of many examples when a Dow heavyweight has carried drastic underperformance from lower-weighted components. Ten of the Dow's 30 components are down year to date, but the Dow is up nearly 8% thanks to the overperformance of its top three heaviest weighted components. Goldman Sachs has the top weighting in the Dow and is up 23%, followed by Caterpillar (NYSE: CAT), which has a 10.3% weighting and is up 56%; and UnitedHealth Group, which has a 4.9% weighting and is up 30% on the year.
Details
The price-weighted Dow index can become unbalanced if a handful of stocks surge in price without issuing stock splits. Goldman Sachs is up 190% in the last five years, and Caterpillar has done even better, jumping 330%. Combined, these two stocks make up over 22% of the Dow.
Source
Originally published at www.fool.com.