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 129 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. CAT also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year CAT was profitable.
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
With an excellent Return On Assets value of 12.30%, CAT belongs to the best of the industry, outperforming 86.40% of the companies in the same industry.
CAT's Return On Equity of 55.37% is amongst the best of the industry. CAT outperforms 96.80% of its industry peers.
The Return On Invested Capital of CAT (19.54%) is better than 94.40% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CAT is significantly above the industry average of 11.00%.
The last Return On Invested Capital (19.54%) for CAT is above the 3 year average (17.74%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.3% | ||
| ROE | 55.37% | ||
| ROIC | 19.54% |
ROA(3y)10.76%
ROA(5y)8.79%
ROE(3y)50.21%
ROE(5y)41.91%
ROIC(3y)17.74%
ROIC(5y)14.27%
1.3 Margins
Looking at the Profit Margin, with a value of 16.65%, CAT belongs to the top of the industry, outperforming 92.80% of the companies in the same industry.
In the last couple of years the Profit Margin of CAT has grown nicely.
CAT has a Operating Margin of 22.71%. This is amongst the best in the industry. CAT outperforms 92.80% of its industry peers.
CAT's Operating Margin has improved in the last couple of years.
CAT has a better Gross Margin (38.16%) than 68.00% of its industry peers.
In the last couple of years the Gross Margin of CAT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.71% | ||
| PM (TTM) | 16.65% | ||
| GM | 38.16% |
OM growth 3Y15.01%
OM growth 5Y5.07%
PM growth 3Y9.36%
PM growth 5Y8.01%
GM growth 3Y7.65%
GM growth 5Y3.39%
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.
CAT has less shares outstanding than it did 1 year ago.
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
CAT has an Altman-Z score of 3.86. This indicates that CAT is financially healthy and has little risk of bankruptcy at the moment.
CAT has a better Altman-Z score (3.86) than 64.00% of its industry peers.
The Debt to FCF ratio of CAT is 4.35, which is a neutral value as it means it would take CAT, 4.35 years of fcf income to pay off all of its debts.
CAT has a Debt to FCF ratio (4.35) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.63 is on the high side and indicates that CAT has dependencies on debt financing.
CAT's Debt to Equity ratio of 1.63 is on the low side compared to the rest of the industry. CAT is outperformed by 88.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.63 | ||
| Debt/FCF | 4.35 | ||
| Altman-Z | 3.86 |
ROIC/WACC1.9
WACC10.28%
2.3 Liquidity
CAT has a Current Ratio of 1.42. This is a normal value and indicates that CAT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.42, CAT is doing worse than 77.60% of the companies in the same industry.
CAT has a Quick Ratio of 1.42. 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 (0.89) is worse than 76.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.42 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
CAT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.25%.
The Earnings Per Share has been growing by 14.64% on average over the past years. This is quite good.
Looking at the last year, CAT shows a decrease in Revenue. The Revenue has decreased by -3.36% in the last year.
The Revenue has been growing slightly by 3.79% on average over the past years.
EPS 1Y (TTM)3.25%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-1.72%
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-5.01%
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 8.64% 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-7.55%
EPS Next 2Y1.86%
EPS Next 3Y5.01%
EPS Next 5Y8.64%
Revenue Next Year-2.6%
Revenue Next 2Y1.21%
Revenue Next 3Y3%
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
The Price/Earnings ratio is 15.53, which indicates a correct valuation of CAT.
Based on the Price/Earnings ratio, CAT is valued a bit cheaper than the industry average as 79.20% of the companies are valued more expensively.
CAT is valuated rather cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
CAT is valuated correctly with a Price/Forward Earnings ratio of 16.79.
73.60% of the companies in the same industry are more expensive than CAT, based on the Price/Forward Earnings ratio.
CAT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.53 | ||
| Fwd PE | 16.79 |
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 70.40% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CAT is valued a bit cheaper than the industry average as 77.60% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.61 | ||
| EV/EBITDA | 11.34 |
4.3 Compensation for Growth
CAT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.06
EPS Next 2Y1.86%
EPS Next 3Y5.01%
5. Dividend
5.1 Amount
CAT has a Yearly Dividend Yield of 1.62%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.65, CAT pays a better dividend. On top of this CAT pays more dividend than 81.60% of the companies listed in the same industry.
CAT's Dividend Yield is slightly below the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.62% |
5.2 History
The dividend of CAT is nicely growing with an annual growth rate of 7.30%!
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)7.3%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
24.52% of the earnings are spent on dividend by CAT. This is a low number and 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.
DP24.52%
EPS Next 2Y1.86%
EPS Next 3Y5.01%
340.04
-9.11 (-2.61%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners72.32%
Inst Owner Change-86.38%
Ins Owners0.18%
Ins Owner Change1.81%
Market Cap164.17B
Analysts68.39
Price Target393 (15.57%)
Short Float %1.68%
Short Ratio3.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.62% |
Yearly Dividend5.39
Dividend Growth(5Y)7.3%
DP24.52%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.35%
Min EPS beat(2)-4.08%
Max EPS beat(2)1.39%
EPS beat(4)3
Avg EPS beat(4)3.08%
Min EPS beat(4)-4.08%
Max EPS beat(4)7.96%
EPS beat(8)7
Avg EPS beat(8)10.48%
EPS beat(12)11
Avg EPS beat(12)10.58%
EPS beat(16)15
Avg EPS beat(16)13.65%
Revenue beat(2)0
Avg Revenue beat(2)-1.44%
Min Revenue beat(2)-2.02%
Max Revenue beat(2)-0.86%
Revenue beat(4)0
Avg Revenue beat(4)-1.57%
Min Revenue beat(4)-2.46%
Max Revenue beat(4)-0.86%
Revenue beat(8)3
Avg Revenue beat(8)-0.02%
Revenue beat(12)6
Avg Revenue beat(12)0.38%
Revenue beat(16)9
Avg Revenue beat(16)0.9%
PT rev (1m)-0.03%
PT rev (3m)2.08%
EPS NQ rev (1m)-16.66%
EPS NQ rev (3m)-24.68%
EPS NY rev (1m)-9.38%
EPS NY rev (3m)-9.51%
Revenue NQ rev (1m)-6.31%
Revenue NQ rev (3m)-9.68%
Revenue NY rev (1m)-3.62%
Revenue NY rev (3m)-3.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.53 | ||
| Fwd PE | 16.79 | ||
| P/S | 2.53 | ||
| P/FCF | 18.61 | ||
| P/OCF | 13.64 | ||
| P/B | 8.42 | ||
| P/tB | 11.85 | ||
| EV/EBITDA | 11.34 |
EPS(TTM)21.9
EY6.44%
EPS(NY)20.25
Fwd EY5.95%
FCF(TTM)18.27
FCFY5.37%
OCF(TTM)24.93
OCFY7.33%
SpS134.24
BVpS40.37
TBVpS28.69
PEG (NY)N/A
PEG (5Y)1.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.3% | ||
| ROE | 55.37% | ||
| ROCE | 26.52% | ||
| ROIC | 19.54% | ||
| ROICexc | 22.08% | ||
| ROICexgc | 24.71% | ||
| OM | 22.71% | ||
| PM (TTM) | 16.65% | ||
| GM | 38.16% | ||
| FCFM | 13.61% |
ROA(3y)10.76%
ROA(5y)8.79%
ROE(3y)50.21%
ROE(5y)41.91%
ROIC(3y)17.74%
ROIC(5y)14.27%
ROICexc(3y)20.15%
ROICexc(5y)16.43%
ROICexgc(3y)22.76%
ROICexgc(5y)18.81%
ROCE(3y)24.37%
ROCE(5y)19.52%
ROICexcg growth 3Y19.45%
ROICexcg growth 5Y5.93%
ROICexc growth 3Y21.46%
ROICexc growth 5Y7.23%
OM growth 3Y15.01%
OM growth 5Y5.07%
PM growth 3Y9.36%
PM growth 5Y8.01%
GM growth 3Y7.65%
GM growth 5Y3.39%
F-Score7
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.63 | ||
| Debt/FCF | 4.35 | ||
| Debt/EBITDA | 1.88 | ||
| Cap/Depr | 149.33% | ||
| Cap/Sales | 4.96% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.34% | ||
| Profit Quality | 81.73% | ||
| Current Ratio | 1.42 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 3.86 |
F-Score7
WACC10.28%
ROIC/WACC1.9
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)3.25%
EPS 3Y26.49%
EPS 5Y14.64%
EPS Q2Q%-1.72%
EPS Next Y-7.55%
EPS Next 2Y1.86%
EPS Next 3Y5.01%
EPS Next 5Y8.64%
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-5.01%
Revenue Next Year-2.6%
Revenue Next 2Y1.21%
Revenue Next 3Y3%
Revenue Next 5Y9.61%
EBIT growth 1Y-0.4%
EBIT growth 3Y24.6%
EBIT growth 5Y9.05%
EBIT Next Year6.82%
EBIT Next 3Y5.55%
EBIT Next 5Y10.3%
FCF growth 1Y-9.94%
FCF growth 3Y23.12%
FCF growth 5Y15.76%
OCF growth 1Y-6.6%
OCF growth 3Y18.69%
OCF growth 5Y11.73%