CATERPILLAR INC (CAT) Stock Fundamental Analysis
NYSE:CAT - US1491231015 - Common Stock
419.04 USD
-15.87 (-3.65%)
421 USD
+1.96 (+0.47%)
We assign a fundamental rating of 6 out of 10 to CAT. CAT was compared to 127 industry peers in the Machinery industry. While CAT has a great profitability rating, there are some minor concerns on its financial health. CAT is quite expensive at the moment. It does show a decent growth rate. CAT also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
CAT had positive earnings in the past year.
CAT had a positive operating cash flow in the past year.
CAT had positive earnings in each of the past 5 years.
In the past 5 years CAT always reported a positive cash flow from operatings.
1.2 Ratios
CAT has a better Return On Assets (10.45%) than 80.31% of its industry peers.
CAT's Return On Equity of 50.57% is amongst the best of the industry. CAT outperforms 96.85% of its industry peers.
Looking at the Return On Invested Capital, with a value of 17.25%, CAT belongs to the top of the industry, outperforming 92.13% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CAT is significantly above the industry average of 10.48%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.45% | ||
| ROE | 50.57% | ||
| ROIC | 17.25% |
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
With an excellent Profit Margin value of 14.95%, CAT belongs to the best of the industry, outperforming 88.19% of the companies in the same industry.
In the last couple of years the Profit Margin of CAT has grown nicely.
CAT's Operating Margin of 20.57% is amongst the best of the industry. CAT outperforms 90.55% of its industry peers.
CAT's Operating Margin has improved in the last couple of years.
CAT has a better Gross Margin (36.53%) than 66.93% of its industry peers.
CAT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.57% | ||
| PM (TTM) | 14.95% | ||
| GM | 36.53% |
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
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.
Compared to 5 years ago, CAT has less shares outstanding
CAT has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.00 indicates that CAT is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.00, CAT is in the better half of the industry, outperforming 66.93% of the companies in the same industry.
The Debt to FCF ratio of CAT is 5.26, which is a neutral value as it means it would take CAT, 5.26 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 5.26, CAT perfoms like the industry average, outperforming 45.67% of the companies in the same industry.
CAT has a Debt/Equity ratio of 1.74. This is a high value indicating a heavy dependency on external financing.
CAT has a Debt to Equity ratio of 1.74. This is amonst the worse of the industry: CAT underperforms 85.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.74 | ||
| Debt/FCF | 5.26 | ||
| Altman-Z | 4 |
ROIC/WACC1.8
WACC9.58%
2.3 Liquidity
CAT has a Current Ratio of 1.34. This is a normal value and indicates that CAT is financially healthy and should not expect problems in meeting its short term obligations.
CAT has a Current ratio of 1.34. This is amonst the worse of the industry: CAT underperforms 81.10% of its industry peers.
CAT has a Quick Ratio of 1.34. This is a bad value and indicates that CAT is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of CAT (0.81) is worse than 75.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.81 |
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%.
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 -4.87% in the last year.
The Revenue has been growing slightly by 3.79% on average over the past years.
EPS 1Y (TTM)-13.7%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-21.2%
Revenue 1Y (TTM)-4.87%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-0.72%
3.2 Future
The Earnings Per Share is expected to grow by 10.23% on average over the next years. This is quite good.
CAT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.18% yearly.
EPS Next Y-15.69%
EPS Next 2Y-0.74%
EPS Next 3Y3.63%
EPS Next 5Y10.23%
Revenue Next Year-0.27%
Revenue Next 2Y2.69%
Revenue Next 3Y3.59%
Revenue Next 5Y5.18%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
The Price/Earnings ratio is 21.73, which indicates a rather expensive current valuation of CAT.
CAT's Price/Earnings is on the same level as the industry average.
CAT's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.08.
A Price/Forward Earnings ratio of 19.42 indicates a rather expensive valuation of CAT.
CAT's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of CAT to the average of the S&P500 Index (22.72), we can say CAT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.73 | ||
| Fwd PE | 19.42 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as CAT.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CAT is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.36 | ||
| EV/EBITDA | 15.45 |
4.3 Compensation for Growth
The excellent profitability rating of CAT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.48
EPS Next 2Y-0.74%
EPS Next 3Y3.63%
5. Dividend
5.1 Amount
CAT has a Yearly Dividend Yield of 1.45%. Purely for dividend investing, there may be better candidates out there.
CAT's Dividend Yield is a higher than the industry average which is at 1.87.
CAT's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
5.2 History
On average, the dividend of CAT grows each year by 7.41%, 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)7.41%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
CAT pays out 28.60% of its income as dividend. This is a sustainable payout ratio.
The dividend of CAT is growing, but earnings are growing more, so the dividend growth is sustainable.
DP28.6%
EPS Next 2Y-0.74%
EPS Next 3Y3.63%
419.04
-15.87 (-3.65%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners72.2%
Inst Owner Change0.21%
Ins Owners0.19%
Ins Owner Change1.95%
Market Cap196.31B
Analysts75.48
Price Target445.47 (6.31%)
Short Float %1.4%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
Yearly Dividend5.41
Dividend Growth(5Y)7.41%
DP28.6%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.88%
Min EPS beat(2)-4.57%
Max EPS beat(2)-3.19%
EPS beat(4)1
Avg EPS beat(4)-2.61%
Min EPS beat(4)-4.57%
Max EPS beat(4)1.39%
EPS beat(8)5
Avg EPS beat(8)3.44%
EPS beat(12)9
Avg EPS beat(12)8.74%
EPS beat(16)13
Avg EPS beat(16)9.79%
Revenue beat(2)1
Avg Revenue beat(2)-1.44%
Min Revenue beat(2)-3.77%
Max Revenue beat(2)0.9%
Revenue beat(4)1
Avg Revenue beat(4)-1.44%
Min Revenue beat(4)-3.77%
Max Revenue beat(4)0.9%
Revenue beat(8)2
Avg Revenue beat(8)-1.25%
Revenue beat(12)6
Avg Revenue beat(12)0.25%
Revenue beat(16)8
Avg Revenue beat(16)0.25%
PT rev (1m)13.33%
PT rev (3m)20.51%
EPS NQ rev (1m)-2.21%
EPS NQ rev (3m)-9.12%
EPS NY rev (1m)-1.87%
EPS NY rev (3m)-1.95%
Revenue NQ rev (1m)4.36%
Revenue NQ rev (3m)3.72%
Revenue NY rev (1m)2.79%
Revenue NY rev (3m)2.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.73 | ||
| Fwd PE | 19.42 | ||
| P/S | 3.11 | ||
| P/FCF | 25.36 | ||
| P/OCF | 17.26 | ||
| P/B | 10.52 | ||
| P/tB | 15.09 | ||
| EV/EBITDA | 15.45 |
EPS(TTM)19.28
EY4.6%
EPS(NY)21.58
Fwd EY5.15%
FCF(TTM)16.52
FCFY3.94%
OCF(TTM)24.28
OCFY5.79%
SpS134.77
BVpS39.83
TBVpS27.77
PEG (NY)N/A
PEG (5Y)1.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.45% | ||
| ROE | 50.57% | ||
| ROCE | 23.44% | ||
| ROIC | 17.25% | ||
| ROICexc | 18.97% | ||
| ROICexgc | 21.17% | ||
| OM | 20.57% | ||
| PM (TTM) | 14.95% | ||
| GM | 36.53% | ||
| FCFM | 12.26% |
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 Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.74 | ||
| Debt/FCF | 5.26 | ||
| Debt/EBITDA | 2.14 | ||
| Cap/Depr | 165.74% | ||
| Cap/Sales | 5.75% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.93% | ||
| Profit Quality | 82.02% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 4 |
F-Score5
WACC9.58%
ROIC/WACC1.8
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-15.69%
EPS Next 2Y-0.74%
EPS Next 3Y3.63%
EPS Next 5Y10.23%
Revenue 1Y (TTM)-4.87%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-0.72%
Revenue Next Year-0.27%
Revenue Next 2Y2.69%
Revenue Next 3Y3.59%
Revenue Next 5Y5.18%
EBIT growth 1Y-14.31%
EBIT growth 3Y25.63%
EBIT growth 5Y9.59%
EBIT Next Year-1.03%
EBIT Next 3Y3.39%
EBIT Next 5Y10.41%
FCF growth 1Y6.61%
FCF growth 3Y23.12%
FCF growth 5Y15.76%
OCF growth 1Y13.25%
OCF growth 3Y18.69%
OCF growth 5Y11.73%