CATERPILLAR INC (CAT)
US1491231015 - Common Stock
We assign a fundamental rating of 6 out of 10 to CAT. CAT was compared to 133 industry peers in the Machinery industry. CAT scores excellent on profitability, but there are some minor concerns on its financial health. CAT has a correct valuation and a medium growth rate.
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.
CAT had positive earnings in each of the past 5 years.
CAT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of CAT (10.50%) is better than 82.44% of its industry peers.
CAT has a better Return On Equity (44.48%) than 98.47% of its industry peers.
CAT has a Return On Invested Capital of 19.06%. This is amongst the best in the industry. CAT outperforms 92.37% of its industry peers.
CAT had an Average Return On Invested Capital over the past 3 years of 10.31%. This is in line with the industry average of 10.32%.
The last Return On Invested Capital (19.06%) for CAT is above the 3 year average (10.31%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.5% | ||
| ROE | 44.48% | ||
| ROIC | 19.06% |
ROA(3y)6.62%
ROA(5y)7.09%
ROE(3y)33.72%
ROE(5y)37.35%
ROIC(3y)10.31%
ROIC(5y)11.31%
1.3 Margins
The Profit Margin of CAT (13.69%) is better than 88.55% of its industry peers.
CAT's Profit Margin has improved in the last couple of years.
CAT has a Operating Margin of 21.42%. This is amongst the best in the industry. CAT outperforms 91.60% of its industry peers.
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.
CAT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.42% | ||
| PM (TTM) | 13.69% | ||
| GM | 35.26% |
OM growth 3Y-1.95%
OM growth 5Y3.11%
PM growth 3Y-0.13%
PM growth 5Y46.74%
GM growth 3Y-1.43%
GM growth 5Y-0.54%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CAT is creating value.
The number of shares outstanding for CAT has been reduced compared to 1 year ago.
CAT has less shares outstanding than it did 5 years ago.
CAT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.51 indicates that CAT is not in any danger for bankruptcy at the moment.
CAT's Altman-Z score of 3.51 is fine compared to the rest of the industry. CAT outperforms 65.65% of its industry peers.
The Debt to FCF ratio of CAT is 4.28, which is a neutral value as it means it would take CAT, 4.28 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.28, CAT is in the better half of the industry, outperforming 61.07% of the companies in the same industry.
CAT has a Debt/Equity ratio of 1.39. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of CAT (1.39) is worse than 88.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.39 | ||
| Debt/FCF | 4.28 | ||
| Altman-Z | 3.51 |
ROIC/WACC2.15
WACC8.85%
2.3 Liquidity
A Current Ratio of 1.45 indicates that CAT should not have too much problems paying its short term obligations.
CAT has a Current ratio of 1.45. This is amonst the worse of the industry: CAT underperforms 82.44% of its industry peers.
CAT has a Quick Ratio of 1.45. This is a bad value and indicates that CAT is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.92, CAT is doing worse than 73.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
CAT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 59.45%, which is quite impressive.
CAT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.73% yearly.
CAT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.59%.
CAT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.50% yearly.
EPS 1Y (TTM)59.45%
EPS 3Y8.89%
EPS 5Y15.73%
EPS growth Q2Q39.75%
Revenue 1Y (TTM)17.59%
Revenue growth 3Y3.37%
Revenue growth 5Y5.5%
Revenue growth Q2Q12.11%
3.2 Future
The Earnings Per Share is expected to grow by 6.30% on average over the next years.
CAT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.31% yearly.
EPS Next Y41.58%
EPS Next 2Y22.13%
EPS Next 3Y16.31%
EPS Next 5Y6.3%
Revenue Next Year14.85%
Revenue Next 2Y9.02%
Revenue Next 3Y7.46%
Revenue Next 5Y5.31%
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
A Price/Earnings ratio of 12.81 indicates a correct valuation of CAT.
CAT's Price/Earnings ratio is a bit cheaper when compared to the industry. CAT is cheaper than 77.10% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 24.97. CAT is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 12.18 indicates a correct valuation of CAT.
CAT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CAT is cheaper than 75.57% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.05, CAT is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.81 | ||
| Fwd PE | 12.18 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CAT indicates a somewhat cheap valuation: CAT is cheaper than 71.76% of the companies listed in the same industry.
76.34% of the companies in the same industry are more expensive than CAT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.26 | ||
| EV/EBITDA | 9.6 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of CAT 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.
PEG (NY)0.31
PEG (5Y)0.81
EPS Next 2Y22.13%
EPS Next 3Y16.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.02%, CAT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.82, CAT pays a better dividend. On top of this CAT pays more dividend than 83.21% of the companies listed in the same industry.
CAT's Dividend Yield is slightly below the S&P500 average, which is at 2.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.02% |
5.2 History
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.44%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
27.66% of the earnings are spent on dividend by CAT. This is a low number and sustainable payout ratio.
The dividend of CAT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP27.66%
EPS Next 2Y22.13%
EPS Next 3Y16.31%
CATERPILLAR INC
NYSE:CAT (12/8/2023, 7:04:00 PM)
After market: 259.5 0 (0%)259.5
+2.09 (+0.81%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap132.38B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.02% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.81 | ||
| Fwd PE | 12.18 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.31
PEG (5Y)0.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.5% | ||
| ROE | 44.48% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 21.42% | ||
| PM (TTM) | 13.69% | ||
| GM | 35.26% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.39 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.92 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)59.45%
EPS 3Y8.89%
EPS 5Y
EPS growth Q2Q
EPS Next Y41.58%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.59%
Revenue growth 3Y3.37%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y