Dow Showdown: GE vs. Caterpillar

This video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and industrials editor/analyst Isaac Pino discuss topics across the investing world.

In honor of March Madness, The Motley Fool is running its own bracket, only it's got nothing to do with basketball. We created a bracket based on performance over the next 12 months for the components of the Dow Jones Industrial Average. Today, Brendan and Isaac pit industry toppers Caterpillar and General Electric head-to-head to see which one is expected to perform the best over the next 12 months. Brendan thinks GE is still cheap as it continues its recovery from the financial crisis. The company pays a solid dividend of 3.4%, and Brendan has been impressed with the steps taken to reduce risk at its GE Capital unit. Isaac goes in-depth on Caterpillar, a stock that he likes for its competitive advantages and position as a market leader. The company is seeing excellent growth in emerging markets, and continues to dominate the U.S. construction equipment market.

GE and Caterpillar are among many companies that realize a significant amount of their revenues abroad. Given the uncertain global economy, many investors may be nervous about investing in companies that are internationally focused, but they shouldn't be. Emerging markets are giving new life to established American companies with deep pockets. As these industry titans look abroad for more sales, they aren't starting with a blank slate -- they're bringing their operational excellence to new markets and thriving. We've uncovered three such companies poised to take advantage of this trend in our special free report: "3 American Companies Set to Dominate the World." The report won't be available forever, so we invite you to enjoy a free copy today. Click here to get your copy today!

At the time this article was published Brendan Byrnes owns shares of Ford. Isaac Pino owns shares of General Electric. The Motley Fool owns shares of Ford.Motley Fool newsletter services recommendFord. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story