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Cramer: These 3 Dow components explain why the market isn't all that expensive

After Dow components Caterpillar, DuPont, and McDonald's surprised the Street with huge earnings gains, Jim Cramer looked into the companies to see if their wins were real or one-offs.

"When Caterpillar's numbers first flashed I said, 'Nah, has to be a one-time gain. No way they could earn $1.28. Wall Street's only looking for 62 cents.' But it was real," the "Mad Money" host said.

Cramer attributed Caterpillar's monster earnings beat to the company's operating leverage, specifically its ability to make few sales but garner massive profits.

Watch the full segment here:

"Where did the strength come from? CAT's energy and transportation divisions really shined. Its backlog was up big, allowing management to raise its full-year outlook to $2.90 up to $3.75," Cramer said. "That's incredible, and given how low the inventories in the system are for Caterpillar goods, I'm predicting there will be many more upside surprises ahead."

Next came DuPont, the chemical and seeds producer gearing up for a merger with Dow Chemical. The company's unusual earnings beat topped analysts estimates of $1.39, coming in at $1.64.

Cramer credited the beat to the company's organic growth, saying the recipe for its 5 percent boost came from being able to raise prices and sell more products at the same time.

"DuPont's got so many things going for it, from the wildly strong agricultural numbers to fantastic materials pricing, plastics that go into things like televisions and cellphone and personal computers, to nutrition, where they make the stuff that goes into probiotics, one of the fastest growing categories out there," Cramer said.

And with the Dow Chemical merger reportedly closing in August, Cramer said owning either company is a boon to your portfolio going forward.

Finally, Cramer pointed to McDonald's CEO Steve Easterbrook as the main driver of the company's tremendous quarter.

The fast food chain delivered 4 percent global same-store sales growth and an earnings beat of $1.47 compared to estimates of $1.33.

"One thing's for certain, this isn't about all-day breakfast any more," Cramer said. "This is about leadership, this is about execution, namely getting the franchisees, who really do run the company, to buy into a plan for more simplified menus, lower prices [and] better technology."

Whether you buy the CEO's ethereal argument that franchisees need to "feel the momentum" to boost business at their restaurants or simply think the beat came from cutting soft drink prices and offering deals on burgers, it's hard to deny McDonald's tactics are working, Cramer added.

The market has grown used to what Cramer calls "manufactured earnings beats," or reports that come in a penny better than expected because of share buybacks or other corporate tricks.

But not these companies. All three outshone expectations via execution of smart tactics that seemed out of reach several years ago, the "Mad Money" host said.

"These are remarkable numbers, ones to be applauded, and they serve as a reminder that in an expensive market, [...] maybe it's a lot cheaper than you think. Maybe it's a lot cheaper than it looks when you break it down to its component parts and look at the astounding individual results that companies Caterpillar, DuPont and McDonald's are reporting right now," he said.

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