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Is NYSE:CAT suited for dividend investing?

By Mill Chart

Last update: Dec 4, 2023

CATERPILLAR INC (NYSE:CAT) was identified as a stock worth exploring by dividend investors by our stock screener. NYSE:CAT scores well on profitability, solvency and liquidity. At the same time it seems to pay a decent dividend. We'll explore this a bit deeper below.

Dividend Analysis for NYSE:CAT

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NYSE:CAT has received a 7 out of 10:

  • Compared to an average industry Dividend Yield of 1.84, CAT pays a better dividend. On top of this CAT pays more dividend than 83.21% of the companies listed in the same industry.
  • On average, the dividend of CAT grows each year by 8.44%, which is quite nice.
  • CAT has been paying a dividend for at least 10 years, so it has a reliable track record.
  • CAT has not decreased their dividend for at least 10 years, which is a reliable track record.
  • 27.66% of the earnings are spent on dividend by CAT. This is a low number and sustainable payout ratio.

How We Gauge Health for NYSE:CAT

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:CAT, the assigned 5 reflects its health status:

  • An Altman-Z score of 3.51 indicates that CAT is not in any danger for bankruptcy at the moment.
  • The Altman-Z score of CAT (3.51) is better than 67.94% of its industry peers.
  • With a decent Debt to FCF ratio value of 4.28, CAT is doing good in the industry, outperforming 61.07% of the companies in the same industry.

Exploring NYSE:CAT's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:CAT, the assigned 9 is a significant indicator of profitability:

  • With an excellent Return On Assets value of 10.50%, CAT belongs to the best of the industry, outperforming 82.44% of the companies in the same industry.
  • CAT has a better Return On Equity (44.48%) than 98.47% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 19.06%, CAT belongs to the top of the industry, outperforming 91.60% 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.
  • The Profit Margin of CAT (13.69%) is better than 88.55% of its industry peers.
  • In the last couple of years the Profit Margin of CAT has grown nicely.
  • Looking at the Operating Margin, with a value of 21.42%, CAT belongs to the top of the industry, outperforming 91.60% of the companies in the same industry.
  • CAT's Operating Margin has improved in the last couple of years.
  • CAT's Gross Margin of 35.26% is fine compared to the rest of the industry. CAT outperforms 70.99% of its industry peers.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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CATERPILLAR INC

NYSE:CAT (2/22/2024, 7:04:00 PM)

After market: 322.09 0 (0%)

322.09

+4.95 (+1.56%)

CAT News

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Deere & Co subsidiary Wirtgen America convinced a federal jury in Delaware on Thursday that construction rival Caterpillar must pay $12.9 million in damages for violating its patent rights in road-building technology. The jury determined that Caterpillar's road-milling machines, which remove the surfaces of roads before repaving them, infringe five Wirtgen patents, a spokesperson for Wirtgen's law firm Sterne Kessler Goldstein & Fox said. The jury also found that Caterpillar's infringement was willful, which could lead a judge to multiply the damages up to three times.

News Image9 hours ago - Yahoo FinanceDeere's Wirtgen wins $12.9 mln from Caterpillar in road-construction patent trial

Deere & Co subsidiary Wirtgen America convinced a federal jury in Delaware on Thursday that construction rival Caterpillar must pay $12.9 million in damages for violating its patent rights in road-building technology. The jury determined that Caterpillar's road-milling machines, which remove the surfaces of roads before repaving them, infringe five Wirtgen patents, a spokesperson for Wirtgen's law firm Sterne Kessler Goldstein & Fox said. The jury also found that Caterpillar's infringement was willful, which could lead a judge to multiply the damages up to three times.

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