Is Caterpillar out of the woods yet? Image source: Company website

After losing nearly 30% of its value in 2015, Caterpillar (NYSE:CAT) stock has revived hopes among investors this year, having gained about 6% year-to-date. However, that pales in comparison to close rival Joy Global's (NYSE:JOY) staggering 28% returns so far this year.

There's a valid reason for the performance gap, though. While Joy Global's fate is tied almost entirely to commodities like coal and iron ore, prices of which are showing signs of bottoming this year, Caterpillar is a much larger and more diversified company that builds equipment catering to the mining, construction, energy, and transportation sectors. While that could delay a turnaround in Caterpillar's fortunes, there are solid reasons to believe that the stock could head higher from here. Take a look at the slideshow below to find out more.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.