CATERPILLAR INC (CAT) Stock Fundamental Analysis
NYSE:CAT - New York Stock Exchange, Inc. - US1491231015 - Common Stock - Currency: USD
CAT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 128 industry peers in the Machinery industry. CAT scores excellent on profitability, but there are some minor concerns on its financial health. CAT has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year CAT was profitable.
In the past year CAT had a positive cash flow from operations.
Each year in the past 5 years CAT has been profitable.
CAT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.70%, CAT belongs to the top of the industry, outperforming 85.16% of the companies in the same industry.
CAT has a Return On Equity of 55.01%. This is amongst the best in the industry. CAT outperforms 96.88% of its industry peers.
With an excellent Return On Invested Capital value of 19.67%, CAT belongs to the best of the industry, outperforming 94.53% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CAT is significantly above the industry average of 10.74%.
The 3 year average ROIC (17.90%) for CAT is below the current ROIC(19.67%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.7% | ||
| ROE | 55.01% | ||
| ROIC | 19.67% |
ROA(3y)10.76%
ROA(5y)8.79%
ROE(3y)50.21%
ROE(5y)41.91%
ROIC(3y)17.9%
ROIC(5y)14.36%
1.3 Margins
CAT's Profit Margin of 15.71% is amongst the best of the industry. CAT outperforms 89.06% of its industry peers.
CAT's Profit Margin has improved in the last couple of years.
CAT has a Operating Margin of 21.83%. This is amongst the best in the industry. CAT outperforms 92.19% 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 37.68%, CAT is in the better half of the industry, outperforming 67.97% of the companies in the same industry.
CAT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.83% | ||
| PM (TTM) | 15.71% | ||
| GM | 37.68% |
OM growth 3Y15.96%
OM growth 5Y5.59%
PM growth 3Y9.36%
PM growth 5Y8.01%
GM growth 3Y7.82%
GM growth 5Y3.49%
2. Health
2.1 Basic Checks
CAT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, CAT has less shares outstanding
Compared to 5 years ago, CAT has less shares outstanding
The debt/assets ratio for CAT is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.27 indicates that CAT is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.27, CAT is doing good in the industry, outperforming 67.97% of the companies in the same industry.
The Debt to FCF ratio of CAT is 4.90, which is a neutral value as it means it would take CAT, 4.90 years of fcf income to pay off all of its debts.
CAT has a Debt to FCF ratio (4.90) which is in line with its industry peers.
A Debt/Equity ratio of 1.62 is on the high side and indicates that CAT has dependencies on debt financing.
CAT has a Debt to Equity ratio of 1.62. This is amonst the worse of the industry: CAT underperforms 85.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.62 | ||
| Debt/FCF | 4.9 | ||
| Altman-Z | 4.27 |
ROIC/WACC2.14
WACC9.21%
2.3 Liquidity
A Current Ratio of 1.32 indicates that CAT should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.32, CAT is doing worse than 82.81% of the companies in the same industry.
CAT has a Quick Ratio of 1.32. This is a bad value and indicates that CAT is not financially healthy enough and could expect problems in meeting its short term obligations.
CAT has a worse Quick ratio (0.77) than 78.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
CAT shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -13.70%.
The Earnings Per Share has been growing by 14.64% on average over the past years. This is quite good.
Looking at the last year, CAT shows a decrease in Revenue. The Revenue has decreased by -3.36% in the last year.
CAT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.79% yearly.
EPS 1Y (TTM)-13.7%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-21.2%
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-0.72%
3.2 Future
The Earnings Per Share is expected to grow by 8.22% on average over the next years. This is quite good.
The Revenue is expected to grow by 3.92% on average over the next years.
EPS Next Y-14.08%
EPS Next 2Y-1.67%
EPS Next 3Y3.07%
EPS Next 5Y8.22%
Revenue Next Year-2.64%
Revenue Next 2Y1.25%
Revenue Next 3Y2.8%
Revenue Next 5Y3.92%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.18, which indicates a rather expensive current valuation of CAT.
The rest of the industry has a similar Price/Earnings ratio as CAT.
Compared to an average S&P500 Price/Earnings ratio of 26.99, CAT is valued at the same level.
A Price/Forward Earnings ratio of 20.20 indicates a rather expensive valuation of CAT.
The rest of the industry has a similar Price/Forward Earnings ratio as CAT.
When comparing the Price/Forward Earnings ratio of CAT to the average of the S&P500 Index (36.36), we can say CAT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.18 | ||
| Fwd PE | 20.2 |
4.2 Price Multiples
CAT's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as CAT.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.54 | ||
| EV/EBITDA | 14.76 |
4.3 Compensation for Growth
The excellent profitability rating of CAT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.52
EPS Next 2Y-1.67%
EPS Next 3Y3.07%
5. Dividend
5.1 Amount
CAT has a Yearly Dividend Yield of 1.39%.
CAT's Dividend Yield is a higher than the industry average which is at 1.92.
Compared to an average S&P500 Dividend Yield of 2.40, CAT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
5.2 History
The dividend of CAT is nicely growing with an annual growth rate of 7.41%!
CAT has been paying a dividend for at least 10 years, so it has a reliable track record.
CAT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.41%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
CAT pays out 26.88% of its income as dividend. This is a sustainable payout ratio.
CAT's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP26.88%
EPS Next 2Y-1.67%
EPS Next 3Y3.07%
427.72
-6.51 (-1.5%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners72.13%
Inst Owner Change1.03%
Ins Owners0.18%
Ins Owner Change3.87%
Market Cap201.16B
Analysts75.48
Price Target404.5 (-5.43%)
Short Float %1.23%
Short Ratio2.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.39% |
Yearly Dividend5.41
Dividend Growth(5Y)7.41%
DP26.88%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.9%
Min EPS beat(2)-3.19%
Max EPS beat(2)1.39%
EPS beat(4)2
Avg EPS beat(4)0.3%
Min EPS beat(4)-4.08%
Max EPS beat(4)7.07%
EPS beat(8)6
Avg EPS beat(8)6.5%
EPS beat(12)10
Avg EPS beat(12)9.51%
EPS beat(16)14
Avg EPS beat(16)10.53%
Revenue beat(2)0
Avg Revenue beat(2)-2.9%
Min Revenue beat(2)-3.77%
Max Revenue beat(2)-2.02%
Revenue beat(4)0
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-3.77%
Max Revenue beat(4)-0.86%
Revenue beat(8)2
Avg Revenue beat(8)-0.87%
Revenue beat(12)5
Avg Revenue beat(12)0.03%
Revenue beat(16)8
Avg Revenue beat(16)0.28%
PT rev (1m)4.19%
PT rev (3m)10.15%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)-2.01%
EPS NY rev (1m)0.13%
EPS NY rev (3m)-4.09%
Revenue NQ rev (1m)0.56%
Revenue NQ rev (3m)2.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.18 | ||
| Fwd PE | 20.2 | ||
| P/S | 3.18 | ||
| P/FCF | 25.54 | ||
| P/OCF | 17.85 | ||
| P/B | 11.13 | ||
| P/tB | 16.18 | ||
| EV/EBITDA | 14.76 |
EPS(TTM)19.28
EY4.51%
EPS(NY)21.17
Fwd EY4.95%
FCF(TTM)16.74
FCFY3.91%
OCF(TTM)23.97
OCFY5.6%
SpS134.5
BVpS38.42
TBVpS26.44
PEG (NY)N/A
PEG (5Y)1.52
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.7% | ||
| ROE | 55.01% | ||
| ROCE | 26.37% | ||
| ROIC | 19.67% | ||
| ROICexc | 21.01% | ||
| ROICexgc | 23.55% | ||
| OM | 21.83% | ||
| PM (TTM) | 15.71% | ||
| GM | 37.68% | ||
| FCFM | 12.45% |
ROA(3y)10.76%
ROA(5y)8.79%
ROE(3y)50.21%
ROE(5y)41.91%
ROIC(3y)17.9%
ROIC(5y)14.36%
ROICexc(3y)20.33%
ROICexc(5y)16.54%
ROICexgc(3y)22.96%
ROICexgc(5y)18.93%
ROCE(3y)24.59%
ROCE(5y)19.65%
ROICexcg growth 3Y20.44%
ROICexcg growth 5Y6.45%
ROICexc growth 3Y22.47%
ROICexc growth 5Y7.76%
OM growth 3Y15.96%
OM growth 5Y5.59%
PM growth 3Y9.36%
PM growth 5Y8.01%
GM growth 3Y7.82%
GM growth 5Y3.49%
F-Score5
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.62 | ||
| Debt/FCF | 4.9 | ||
| Debt/EBITDA | 1.83 | ||
| Cap/Depr | 156.62% | ||
| Cap/Sales | 5.37% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.54% | ||
| Profit Quality | 79.23% | ||
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 4.27 |
F-Score5
WACC9.21%
ROIC/WACC2.14
Cap/Depr(3y)136.89%
Cap/Depr(5y)120.55%
Cap/Sales(3y)4.65%
Cap/Sales(5y)4.77%
Profit Quality(3y)84.51%
Profit Quality(5y)93.37%
High Growth Momentum
Growth
EPS 1Y (TTM)-13.7%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-21.2%
EPS Next Y-14.08%
EPS Next 2Y-1.67%
EPS Next 3Y3.07%
EPS Next 5Y8.22%
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-0.72%
Revenue Next Year-2.64%
Revenue Next 2Y1.25%
Revenue Next 3Y2.8%
Revenue Next 5Y3.92%
EBIT growth 1Y-8.1%
EBIT growth 3Y25.63%
EBIT growth 5Y9.59%
EBIT Next Year-1.03%
EBIT Next 3Y3.39%
EBIT Next 5Y8.31%
FCF growth 1Y23.9%
FCF growth 3Y23.12%
FCF growth 5Y15.76%
OCF growth 1Y24.88%
OCF growth 3Y18.69%
OCF growth 5Y11.73%