Is Caterpillar Stock’s Winning Streak Skill Or Luck?
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Caterpillar Inc. (CAT), the maker of construction machines, engines and turbines, has beaten the S&P 500 in each of the last five years. A record like that looks like the mark of an exceptional company. Of about 480 large U.S. stocks, how many do you think managed the same streak?
How Rare Is Caterpillar’s Winning Streak?
Caterpillar shares beat the index in every one of the five twelve-month periods since October 2021, including the first, when both fell.
| Period | The stock | S&P 500 |
|---|---|---|
| Oct 19, 2021 to Oct 19, 2022 | -8.3% | -18.2% |
| Oct 19, 2022 to Oct 20, 2023 | +35.1% | +14.3% |
| Oct 20, 2023 to Oct 22, 2024 | +55.9% | +38.5% |
| Oct 22, 2024 to Oct 24, 2025 | +34.6% | +16.1% |
| Oct 24, 2025 to Oct 27, 2026 | +36.5% | +13.7% |
Price changes over periods of 252 trading sessions each, dividends excluded.
Only 8 of the 485 current S&P 500 members with five years of prices have a streak that long. That is rarer than it sounds, because a single stock usually loses to the index. In the latest year, only 42.3% of them beat it. Beating the index once is already the less common outcome, and doing it five years running is rare.
Could A Streak Like This Be Luck?
When dealing with this many stocks, a few will put together long streaks even if no company is any better than another. About four in ten of these stocks beat the index in a typical year. Suppose it were pure luck which ones did. That would mean putting all 485 names in a hat each year and drawing a little over four in ten of them as that year’s winners.
Do that five years in a row, and about six names come out every single time. Those six companies would have a five-year winning streak with no skill involved at all.
In fact, 8 companies have such a streak, a couple more than luck alone would give. Because a gap that small could come from luck too, you cannot tell from the share price whether any of the eight are there on merit, or which ones.
Did Caterpillar’s Profit Grow Through The Streak?
While Caterpillar sells machines through its Construction Industries business, its largest business is Power & Energy. That segment sells engines and turbines and brought in 47.6% of revenue in fiscal 2025.
Measured as reported net income, profit rose in four of the five years of the streak. It grew 110.6% over the whole stretch, while the share price rose 254.6% before dividends.
Even though the shares rose more than twice as fast as profit, profit still rose in most of the streak’s years. That is evidence anyone can check against Caterpillar’s results, not a ruling on skill.
What To Watch Instead Of The Streak
Power generation is growing quickly at Caterpillar now. Management said on the August 4, 2026 call that power generation’s sales to users grew 72% in the June 2026 quarter, driven by very strong demand for large gensets and turbines used in data centers. Caterpillar’s total backlog was up about 92% from a year earlier. Management also raised its outlook for 2026 sales growth to the mid- to high teens.
While five good years for the shares are no guide to the next one, the profit behind them can be followed every quarter. The figure to watch is Caterpillar’s twelve-month profit growth, starting with its next report, due in October 2026.
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