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NYSE:CAT is probably undervalued for the fundamentals it is displaying.

By Mill Chart

Last update: Nov 10, 2023

Uncover the potential of CATERPILLAR INC (NYSE:CAT) as our stock screener's choice for an undervalued stock. NYSE:CAT maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Valuation Assessment of NYSE:CAT

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:CAT has received a 7 out of 10:

  • CAT is valuated reasonably with a Price/Earnings ratio of 11.56.
  • Based on the Price/Earnings ratio, CAT is valued a bit cheaper than the industry average as 78.46% of the companies are valued more expensively.
  • CAT is valuated cheaply when we compare the Price/Earnings ratio to 23.21, which is the current average of the S&P500 Index.
  • The Price/Forward Earnings ratio is 10.99, which indicates a very decent valuation of CAT.
  • Based on the Price/Forward Earnings ratio, CAT is valued a bit cheaper than 76.15% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 18.62, CAT is valued a bit cheaper.
  • Based on the Enterprise Value to EBITDA ratio, CAT is valued a bit cheaper than 70.77% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, CAT is valued a bit cheaper than 79.23% of the companies in the same industry.
  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • CAT has an outstanding profitability rating, which may justify a higher PE ratio.
  • CAT's earnings are expected to grow with 16.31% in the coming years. This may justify a more expensive valuation.

How do we evaluate the Profitability for NYSE:CAT?

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:CAT scores a 9 out of 10:

  • CAT has a better Return On Assets (10.50%) than 81.54% of its industry peers.
  • With an excellent Return On Equity value of 44.48%, CAT belongs to the best of the industry, outperforming 98.46% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 19.06%, CAT belongs to the top of the industry, outperforming 92.31% of the companies in the same industry.
  • The 3 year average ROIC (10.31%) for CAT is below the current ROIC(19.06%), indicating increased profibility in the last year.
  • Looking at the Profit Margin, with a value of 13.69%, CAT belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.
  • CAT's Profit Margin has improved in the last couple of years.
  • CAT has a better Operating Margin (21.42%) than 93.08% of its industry peers.
  • In the last couple of years the Operating Margin of CAT has grown nicely.
  • Looking at the Gross Margin, with a value of 35.26%, CAT is in the better half of the industry, outperforming 70.77% of the companies in the same industry.

What does the Health looks like for NYSE:CAT

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:CAT scores a 5 out of 10:

  • An Altman-Z score of 3.40 indicates that CAT is not in any danger for bankruptcy at the moment.
  • CAT has a better Altman-Z score (3.40) than 67.69% of its industry peers.
  • CAT has a better Debt to FCF ratio (4.28) than 62.31% of its industry peers.

Evaluating Growth: NYSE:CAT

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:CAT scores a 5 out of 10:

  • The Earnings Per Share has grown by an impressive 59.45% over the past year.
  • The Earnings Per Share has been growing by 15.73% on average over the past years. This is quite good.
  • Looking at the last year, CAT shows a quite strong growth in Revenue. The Revenue has grown by 17.59% in the last year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of CAT contains the most current fundamental analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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CATERPILLAR INC

NYSE:CAT (2/23/2024, 7:04:00 PM)

After market: 323.38 -0.5 (-0.15%)

323.88

+1.79 (+0.56%)

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