CATERPILLAR INC (CAT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CAT - US1491231015 - Common Stock
626.62 USD
-21.79 (-3.36%)
626.29 USD
-0.33 (-0.05%)
Overall CAT gets a fundamental rating of 5 out of 10. We evaluated CAT against 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.
- CAT had a positive operating cash flow in the past year.
- CAT had positive earnings in each of the past 5 years.
- Each year in the past 5 years CAT had a positive operating cash flow.
1.2 Ratios
- CAT's Return On Assets of 9.89% is amongst the best of the industry. CAT outperforms 80.30% of its industry peers.
- CAT has a better Return On Equity (44.89%) than 96.97% of its industry peers.
- CAT has a Return On Invested Capital of 16.47%. This is amongst the best in the industry. CAT outperforms 92.42% of its industry peers.
- The Average Return On Invested Capital over the past 3 years 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 has a better Profit Margin (14.34%) than 84.85% of its industry peers.
- CAT's Profit Margin has improved in the last couple of years.
- 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.
- CAT has a Gross Margin of 35.53%. This is in the better half of the industry: CAT outperforms 65.91% of its industry peers.
- 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
- 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.
- The debt/assets ratio for CAT is higher compared to a year ago.
2.2 Solvency
- CAT has an Altman-Z score of 4.69. This indicates that CAT is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of CAT (4.69) 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 comparable to the rest of the industry.
- CAT has a Debt/Equity ratio of 1.56. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.56, CAT is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.56 | ||
| Debt/FCF | 4.34 | ||
| Altman-Z | 4.69 |
ROIC/WACC1.74
WACC9.44%
2.3 Liquidity
- A Current Ratio of 1.38 indicates that CAT should not have too much problems paying its short term obligations.
- CAT has a Current ratio of 1.38. This is in the lower half of the industry: CAT underperforms 78.03% of its industry peers.
- A Quick Ratio of 0.86 indicates that CAT may have some problems paying its short term obligations.
- With a Quick ratio value of 0.86, CAT is not doing good in the industry: 73.48% of the companies in the same industry are doing better.
| 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.
- Looking at the last year, CAT shows a decrease in Revenue. The Revenue has decreased by -1.51% in the last year.
- CAT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.79% yearly.
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
- CAT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.73% yearly.
- 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
- CAT is valuated quite expensively with a Price/Earnings ratio of 32.88.
- CAT's Price/Earnings is on the same level as the industry average.
- CAT's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 27.78 indicates a quite expensive valuation of CAT.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CAT is on the same level as its industry peers.
- CAT is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.88 | ||
| Fwd PE | 27.78 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CAT is valued a bit more expensive than 64.39% of the companies in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as CAT.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.63 | ||
| EV/EBITDA | 21.36 |
4.3 Compensation for Growth
- The excellent profitability rating of CAT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.25
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.
- Compared to an average industry Dividend Yield of 1.01, CAT pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.93, CAT pays less dividend than the S&P500 average, which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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
- 29.36% of the earnings are spent on dividend by CAT. This is a low number and 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 32.88 and the Price/Book (PB) ratio is 14.2.
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.