CATERPILLAR INC (CAT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CAT - US1491231015 - Common Stock
633.57 USD
-5.34 (-0.84%)
Taking everything into account, CAT scores 5 out of 10 in our fundamental rating. CAT was compared to 132 industry peers in the Machinery industry. CAT scores excellent on profitability, but there are some minor concerns on its financial health. CAT is valied quite expensively at the moment, while it does show a decent 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.
- In the past 5 years CAT has always been profitable.
- Each year in the past 5 years CAT had a positive operating cash flow.
1.2 Ratios
- CAT has a better Return On Assets (9.89%) than 80.30% of its industry peers.
- CAT's Return On Equity of 44.89% is amongst the best of the industry. CAT outperforms 96.97% of its industry peers.
- With an excellent Return On Invested Capital value of 16.47%, CAT belongs to the best of the industry, outperforming 92.42% 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 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.89% | ||
| ROE | 44.89% | ||
| ROIC | 16.47% |
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 14.34% is amongst the best of the industry. CAT outperforms 84.85% of its industry peers.
- In the last couple of years the Profit Margin of CAT has grown nicely.
- CAT has a better Operating Margin (19.93%) than 89.39% of its industry peers.
- CAT's Operating Margin has improved in the last couple of years.
- With a decent Gross Margin value of 35.53%, CAT is doing good in the industry, outperforming 65.91% of the companies in the same industry.
- CAT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.93% | ||
| PM (TTM) | 14.34% | ||
| GM | 35.53% |
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.
- Compared to 1 year ago, CAT has less shares outstanding
- The number of shares outstanding for CAT has been reduced compared to 5 years ago.
- CAT has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.74 indicates that CAT is not in any danger for bankruptcy at the moment.
- The Altman-Z score of CAT (4.74) is better than 70.45% of its industry peers.
- CAT has a debt to FCF ratio of 4.34. This is a neutral value as CAT would need 4.34 years to pay back of all of its debts.
- CAT has a Debt to FCF ratio (4.34) which is in line with its industry peers.
- A Debt/Equity ratio of 1.56 is on the high side and indicates that CAT has dependencies on debt financing.
- CAT has a Debt to Equity ratio of 1.56. This is amonst the worse of the industry: CAT underperforms 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.56 | ||
| Debt/FCF | 4.34 | ||
| Altman-Z | 4.74 |
ROIC/WACC1.75
WACC9.42%
2.3 Liquidity
- CAT has a Current Ratio of 1.38. 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 (1.38) is worse than 78.03% of its industry peers.
- CAT has a Quick Ratio of 1.38. 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 0.86, CAT is doing worse than 73.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
- CAT shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -13.32%.
- 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.
- The Revenue has decreased by -1.51% in the past year.
- The Revenue has been growing slightly by 3.79% on average over the past years.
EPS 1Y (TTM)-13.32%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-4.26%
Revenue 1Y (TTM)-1.51%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%9.51%
3.2 Future
- The Earnings Per Share is expected to grow by 14.73% 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 4.38% yearly.
EPS Next Y-13.69%
EPS Next 2Y1.49%
EPS Next 3Y6.95%
EPS Next 5Y14.73%
Revenue Next Year2.4%
Revenue Next 2Y5.27%
Revenue Next 3Y6.12%
Revenue Next 5Y4.38%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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 33.24 indicates a quite expensive valuation of CAT.
- Compared to the rest of the industry, the Price/Earnings ratio of CAT is on the same level as its industry peers.
- CAT's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.82.
- A Price/Forward Earnings ratio of 28.09 indicates a quite expensive valuation of CAT.
- CAT's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. CAT is more expensive than 60.61% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of CAT to the average of the S&P500 Index (25.95), we can say CAT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.24 | ||
| Fwd PE | 28.09 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CAT indicates a slightly more expensive valuation: CAT is more expensive than 64.39% of the companies listed in the same industry.
- 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 | 30.97 | ||
| EV/EBITDA | 21.74 |
4.3 Compensation for Growth
- The excellent profitability rating of CAT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.27
EPS Next 2Y1.49%
EPS Next 3Y6.95%
5. Dividend
5.1 Amount
- CAT has a yearly dividend return of 0.93%, which is pretty low.
- CAT's Dividend Yield is a higher than the industry average which is at 1.01.
- Compared to an average S&P500 Dividend Yield of 1.82, CAT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
5.2 History
- The dividend of CAT is nicely growing with an annual growth rate of 7.41%!
- CAT has paid a dividend for at least 10 years, which is 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
- CAT pays out 29.36% of its income as dividend. This is a sustainable payout ratio.
- CAT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP29.36%
EPS Next 2Y1.49%
EPS Next 3Y6.95%
CATERPILLAR INC / CAT FAQ
What is the ChartMill fundamental rating of CATERPILLAR INC (CAT) stock?
ChartMill assigns a fundamental rating of 5 / 10 to CAT.
What is the valuation status of CATERPILLAR INC (CAT) stock?
ChartMill assigns a valuation rating of 2 / 10 to CATERPILLAR INC (CAT). This can be considered as Overvalued.
What is the profitability of CAT stock?
CATERPILLAR INC (CAT) has a profitability rating of 9 / 10.
What is the valuation of CATERPILLAR INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for CATERPILLAR INC (CAT) is 33.24 and the Price/Book (PB) ratio is 14.35.
Can you provide the expected EPS growth for CAT stock?
The Earnings per Share (EPS) of CATERPILLAR INC (CAT) is expected to decline by -13.69% in the next year.