CATERPILLAR INC (CAT) Stock Fundamental Analysis
NYSE:CAT - New York Stock Exchange, Inc. - US1491231015 - Common Stock - Currency: USD
Taking everything into account, CAT scores 6 out of 10 in our fundamental rating. 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 is not valued too expensively and it also shows 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
The Return On Assets of CAT (12.30%) is better than 88.28% of its industry peers.
With an excellent Return On Equity value of 55.37%, CAT belongs to the best of the industry, outperforming 97.66% of the companies in the same industry.
The Return On Invested Capital of CAT (19.54%) is better than 94.53% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CAT is significantly above the industry average of 10.67%.
The 3 year average ROIC (17.74%) for CAT is below the current ROIC(19.54%), indicating increased profibility in the last year.
| 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
With an excellent Profit Margin value of 16.65%, CAT belongs to the best of the industry, outperforming 92.97% 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 22.71% is amongst the best of the industry. CAT outperforms 92.97% of its industry peers.
CAT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 38.16%, CAT is in the better half of the industry, outperforming 70.31% 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 | 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
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
An Altman-Z score of 3.66 indicates that CAT is not in any danger for bankruptcy at the moment.
CAT has a Altman-Z score of 3.66. This is in the better half of the industry: CAT outperforms 64.84% 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.
With a Debt to FCF ratio value of 4.35, CAT perfoms like the industry average, outperforming 54.69% of the companies in the same industry.
CAT has a Debt/Equity ratio of 1.63. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.63, CAT is doing worse than 83.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.63 | ||
| Debt/FCF | 4.35 | ||
| Altman-Z | 3.66 |
ROIC/WACC1.98
WACC9.86%
2.3 Liquidity
A Current Ratio of 1.42 indicates that CAT should not have too much problems paying its short term obligations.
CAT's Current ratio of 1.42 is on the low side compared to the rest of the industry. CAT is outperformed by 76.56% of its industry peers.
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.
With a Quick ratio value of 0.89, CAT is not doing good in the industry: 72.66% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.42 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.25% over the past year.
CAT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.64% yearly.
The Revenue has decreased by -3.36% in the past 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
The Earnings Per Share is expected to grow by 8.22% on average over the next years. This is quite good.
The Revenue is expected to grow by 9.61% on average over the next years. This is quite good.
EPS Next Y-7.52%
EPS Next 2Y1.78%
EPS Next 3Y5.02%
EPS Next 5Y8.22%
Revenue Next Year-2.67%
Revenue Next 2Y1.03%
Revenue Next 3Y2.44%
Revenue Next 5Y9.61%
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 decreasing.
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
With a Price/Earnings ratio of 13.44, CAT is valued correctly.
75.78% of the companies in the same industry are more expensive than CAT, based on the Price/Earnings ratio.
CAT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.29.
CAT is valuated correctly with a Price/Forward Earnings ratio of 14.53.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CAT indicates a somewhat cheap valuation: CAT is cheaper than 71.09% of the companies listed in the same industry.
CAT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.44 | ||
| Fwd PE | 14.53 |
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 68.75% of the companies listed in the same industry.
CAT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CAT is cheaper than 69.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.94 | ||
| EV/EBITDA | 9.94 |
4.3 Compensation for Growth
The excellent profitability rating of CAT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.92
EPS Next 2Y1.78%
EPS Next 3Y5.02%
5. Dividend
5.1 Amount
CAT has a Yearly Dividend Yield of 1.95%.
In the last 3 months the price of CAT has falen by -23.77%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
CAT's Dividend Yield is a higher than the industry average which is at 2.12.
CAT's Dividend Yield is slightly below the S&P500 average, which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 2Y1.78%
EPS Next 3Y5.02%
294.25
+4.11 (+1.42%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners72.32%
Inst Owner Change0%
Ins Owners0.18%
Ins Owner Change2.99%
Market Cap140.63B
Analysts69.68
Price Target389.69 (32.44%)
Short Float %2.12%
Short Ratio4.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
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)-0.65%
PT rev (3m)-0.87%
EPS NQ rev (1m)-0.39%
EPS NQ rev (3m)-15.65%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-9.36%
Revenue NQ rev (1m)-0.86%
Revenue NQ rev (3m)-5.93%
Revenue NY rev (1m)-0.93%
Revenue NY rev (3m)-3.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.44 | ||
| Fwd PE | 14.53 | ||
| P/S | 2.17 | ||
| P/FCF | 15.94 | ||
| P/OCF | 11.69 | ||
| P/B | 7.22 | ||
| P/tB | 10.15 | ||
| EV/EBITDA | 9.94 |
EPS(TTM)21.9
EY7.44%
EPS(NY)20.25
Fwd EY6.88%
FCF(TTM)18.45
FCFY6.27%
OCF(TTM)25.18
OCFY8.56%
SpS135.6
BVpS40.78
TBVpS28.98
PEG (NY)N/A
PEG (5Y)0.92
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 | 3.66 |
F-Score7
WACC9.86%
ROIC/WACC1.98
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-7.52%
EPS Next 2Y1.78%
EPS Next 3Y5.02%
EPS Next 5Y8.22%
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y8.34%
Revenue growth 5Y3.79%
Sales Q2Q%-5.01%
Revenue Next Year-2.67%
Revenue Next 2Y1.03%
Revenue Next 3Y2.44%
Revenue Next 5Y9.61%
EBIT growth 1Y-0.4%
EBIT growth 3Y24.6%
EBIT growth 5Y9.05%
EBIT Next Year3.68%
EBIT Next 3Y4.38%
EBIT Next 5Y8.31%
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%