CATERPILLAR INC (CAT) Stock Fundamental Analysis
NYSE:CAT - New York Stock Exchange, Inc. - US1491231015 - Common Stock - Currency: USD
Taking everything into account, CAT scores 6 out of 10 in our fundamental rating. CAT was compared to 128 industry peers in the Machinery industry. While CAT belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CAT has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year CAT was profitable.
CAT had a positive operating cash flow in the past year.
In the past 5 years CAT has always been profitable.
CAT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 11.70%, CAT belongs to the best of the industry, outperforming 85.94% of the companies in the same industry.
CAT's Return On Equity of 55.01% is amongst the best of the industry. CAT outperforms 97.66% of its industry peers.
CAT's Return On Invested Capital of 19.67% is amongst the best of the industry. CAT outperforms 94.53% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CAT is significantly above the industry average of 10.67%.
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's Operating Margin of 21.83% is amongst the best of the industry. CAT outperforms 92.19% of its industry peers.
In the last couple of years the Operating Margin of CAT has grown nicely.
CAT has a Gross Margin of 37.68%. This is in the better half of the industry: CAT outperforms 68.75% of its industry peers.
In the last couple of years the Gross Margin of CAT has grown nicely.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CAT is creating value.
Compared to 1 year ago, CAT has less shares outstanding
Compared to 5 years ago, CAT has less shares outstanding
Compared to 1 year ago, CAT has a worse debt to assets ratio.
2.2 Solvency
CAT has an Altman-Z score of 3.78. This indicates that CAT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CAT (3.78) is better than 64.84% of its industry peers.
CAT has a debt to FCF ratio of 4.90. This is a neutral value as CAT would need 4.90 years to pay back of all of its debts.
The Debt to FCF ratio of CAT (4.90) is comparable to the rest of the industry.
A Debt/Equity ratio of 1.62 is on the high side and indicates that CAT has dependencies on debt financing.
With a Debt to Equity ratio value of 1.62, CAT is not doing good in the industry: 83.59% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.62 | ||
| Debt/FCF | 4.9 | ||
| Altman-Z | 3.78 |
ROIC/WACC2.03
WACC9.69%
2.3 Liquidity
CAT has a Current Ratio of 1.32. This is a normal value and indicates that CAT is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of CAT (1.32) is worse than 83.59% of its industry peers.
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
The earnings per share for CAT have decreased by -6.16% in the last year.
CAT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.64% yearly.
CAT shows a decrease in Revenue. In the last year, the revenue decreased by -5.58%.
The Revenue has been growing slightly by 3.79% on average over the past years.
EPS 1Y (TTM)-6.16%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-24.11%
Revenue 1Y (TTM)-5.58%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-9.81%
3.2 Future
The Earnings Per Share is expected to grow by 8.22% on average over the next years. This is quite good.
Based on estimates for the next years, CAT will show a quite strong growth in Revenue. The Revenue will grow by 9.61% on average per year.
EPS Next Y-10.42%
EPS Next 2Y-0.25%
EPS Next 3Y3.88%
EPS Next 5Y8.22%
Revenue Next Year-3.77%
Revenue Next 2Y0.24%
Revenue Next 3Y2.11%
Revenue Next 5Y9.61%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
CAT is valuated correctly with a Price/Earnings ratio of 15.75.
Compared to the rest of the industry, the Price/Earnings ratio of CAT indicates a somewhat cheap valuation: CAT is cheaper than 72.66% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of CAT to the average of the S&P500 Index (28.22), we can say CAT is valued slightly cheaper.
The Price/Forward Earnings ratio is 14.85, which indicates a correct valuation of CAT.
Based on the Price/Forward Earnings ratio, CAT is valued a bit cheaper than 72.66% of the companies in the same industry.
CAT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.75 | ||
| Fwd PE | 14.85 |
4.2 Price Multiples
63.28% of the companies in the same industry are more expensive than CAT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, CAT is valued a bit cheaper than 64.06% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.64 | ||
| EV/EBITDA | 11.37 |
4.3 Compensation for Growth
CAT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.08
EPS Next 2Y-0.25%
EPS Next 3Y3.88%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.80%, CAT has a reasonable but not impressive dividend return.
CAT's Dividend Yield is a higher than the industry average which is at 2.06.
CAT's Dividend Yield is slightly below the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.41%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
26.88% of the earnings are spent on dividend by CAT. This is a low number and sustainable payout ratio.
The dividend of CAT is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP26.88%
EPS Next 2Y-0.25%
EPS Next 3Y3.88%
323.68
+9.72 (+3.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners72.32%
Inst Owner Change1.01%
Ins Owners0.18%
Ins Owner Change2.99%
Market Cap154.70B
Analysts69.38
Price Target356.85 (10.25%)
Short Float %1.66%
Short Ratio2.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
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)-1.05%
Min EPS beat(2)-3.49%
Max EPS beat(2)1.39%
EPS beat(4)2
Avg EPS beat(4)0.22%
Min EPS beat(4)-4.08%
Max EPS beat(4)7.07%
EPS beat(8)6
Avg EPS beat(8)6.46%
EPS beat(12)10
Avg EPS beat(12)9.48%
EPS beat(16)14
Avg EPS beat(16)10.51%
Revenue beat(2)0
Avg Revenue beat(2)-2.7%
Min Revenue beat(2)-3.38%
Max Revenue beat(2)-2.02%
Revenue beat(4)0
Avg Revenue beat(4)-1.8%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)-0.86%
Revenue beat(8)2
Avg Revenue beat(8)-0.82%
Revenue beat(12)5
Avg Revenue beat(12)0.07%
Revenue beat(16)8
Avg Revenue beat(16)0.31%
PT rev (1m)-9.02%
PT rev (3m)-9.23%
EPS NQ rev (1m)0.14%
EPS NQ rev (3m)-15.57%
EPS NY rev (1m)-3.13%
EPS NY rev (3m)-12.2%
Revenue NQ rev (1m)-0.65%
Revenue NQ rev (3m)-5.97%
Revenue NY rev (1m)-2.05%
Revenue NY rev (3m)-4.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.75 | ||
| Fwd PE | 14.85 | ||
| P/S | 2.45 | ||
| P/FCF | 19.64 | ||
| P/OCF | 13.72 | ||
| P/B | 8.56 | ||
| P/tB | 12.44 | ||
| EV/EBITDA | 11.37 |
EPS(TTM)20.55
EY6.35%
EPS(NY)21.79
Fwd EY6.73%
FCF(TTM)16.48
FCFY5.09%
OCF(TTM)23.59
OCFY7.29%
SpS132.36
BVpS37.8
TBVpS26.02
PEG (NY)N/A
PEG (5Y)1.08
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 | 3.78 |
F-Score5
WACC9.69%
ROIC/WACC2.03
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)-6.16%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-24.11%
EPS Next Y-10.42%
EPS Next 2Y-0.25%
EPS Next 3Y3.88%
EPS Next 5Y8.22%
Revenue 1Y (TTM)-5.58%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-9.81%
Revenue Next Year-3.77%
Revenue Next 2Y0.24%
Revenue Next 3Y2.11%
Revenue Next 5Y9.61%
EBIT growth 1Y-8.1%
EBIT growth 3Y25.63%
EBIT growth 5Y9.59%
EBIT Next Year3.68%
EBIT Next 3Y4.38%
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%