CATERPILLAR INC (CAT) Stock Fundamental Analysis
NYSE:CAT - New York Stock Exchange, Inc. - US1491231015 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to CAT. CAT was compared to 128 industry peers in the Machinery industry. CAT has an excellent profitability rating, 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.
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
CAT's Return On Assets of 11.70% is amongst the best of the industry. CAT outperforms 85.94% of its industry peers.
CAT has a better Return On Equity (55.01%) than 97.66% of its industry peers.
The Return On Invested Capital of CAT (19.67%) is better than 94.53% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CAT is significantly above the industry average of 10.31%.
The last Return On Invested Capital (19.67%) for CAT is above the 3 year average (17.90%), which is a sign of increasing profitability.
| 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 has a Profit Margin of 15.71%. This is amongst the best in the industry. CAT outperforms 88.28% of its industry peers.
CAT's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 21.83%, CAT belongs to the best of the industry, outperforming 92.19% of the companies in the same industry.
CAT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 37.68%, CAT is in the better half of the industry, outperforming 69.53% of the companies in the same industry.
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
CAT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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 worse debt/assets ratio than last year.
2.2 Solvency
CAT has an Altman-Z score of 3.92. This indicates that CAT is financially healthy and has little risk of bankruptcy at the moment.
CAT has a better Altman-Z score (3.92) than 65.63% of its industry peers.
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 of 4.90. This is comparable to the rest of the industry: CAT outperforms 53.91% of 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 worse Debt to Equity ratio (1.62) than 83.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.62 | ||
| Debt/FCF | 4.9 | ||
| Altman-Z | 3.92 |
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 82.03% 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's Quick ratio of 0.77 is on the low side compared to the rest of the industry. CAT is outperformed by 77.34% 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.
Measured over the past years, CAT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.64% on average per year.
Looking at the last year, CAT shows a decrease in Revenue. The Revenue has decreased by -5.58% in the last year.
Measured over the past years, CAT shows a small growth in Revenue. The Revenue has been growing by 3.79% on average per year.
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
CAT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.22% yearly.
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-14.01%
EPS Next 2Y-2.19%
EPS Next 3Y2.72%
EPS Next 5Y8.22%
Revenue Next Year-2.48%
Revenue Next 2Y1.17%
Revenue Next 3Y2.67%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.71, the valuation of CAT can be described as correct.
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.
CAT's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.82.
The Price/Forward Earnings ratio is 16.39, which indicates a correct valuation of CAT.
Based on the Price/Forward Earnings ratio, CAT is valued a bit cheaper than the industry average as 60.94% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of CAT to the average of the S&P500 Index (21.76), we can say CAT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.71 | ||
| Fwd PE | 16.39 |
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 61.72% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CAT indicates a somewhat cheap valuation: CAT is cheaper than 62.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.84 | ||
| EV/EBITDA | 12.3 |
4.3 Compensation for Growth
CAT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.14
EPS Next 2Y-2.19%
EPS Next 3Y2.72%
5. Dividend
5.1 Amount
CAT has a Yearly Dividend Yield of 1.63%.
Compared to an average industry Dividend Yield of 1.88, CAT pays a bit more dividend than its industry peers.
CAT's Dividend Yield is slightly below the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
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-2.19%
EPS Next 3Y2.72%
343.39
-1.8 (-0.52%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners72.32%
Inst Owner Change-1.96%
Ins Owners0.18%
Ins Owner Change2.43%
Market Cap161.50B
Analysts69.38
Price Target369.65 (7.65%)
Short Float %1.54%
Short Ratio2.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
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)-5.14%
PT rev (3m)-6.98%
EPS NQ rev (1m)-4.59%
EPS NQ rev (3m)-6.23%
EPS NY rev (1m)-4.01%
EPS NY rev (3m)-6.73%
Revenue NQ rev (1m)2.09%
Revenue NQ rev (3m)2.26%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)-1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.71 | ||
| Fwd PE | 16.39 | ||
| P/S | 2.59 | ||
| P/FCF | 20.84 | ||
| P/OCF | 14.56 | ||
| P/B | 9.08 | ||
| P/tB | 13.2 | ||
| EV/EBITDA | 12.3 |
EPS(TTM)20.55
EY5.98%
EPS(NY)20.95
Fwd EY6.1%
FCF(TTM)16.48
FCFY4.8%
OCF(TTM)23.59
OCFY6.87%
SpS132.36
BVpS37.8
TBVpS26.02
PEG (NY)N/A
PEG (5Y)1.14
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 | 3.92 |
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-14.01%
EPS Next 2Y-2.19%
EPS Next 3Y2.72%
EPS Next 5Y8.22%
Revenue 1Y (TTM)-5.58%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-9.81%
Revenue Next Year-2.48%
Revenue Next 2Y1.17%
Revenue Next 3Y2.67%
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%