NYSE:CAT

Stock Analysis Report

Executive Summary

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines.

Snowflake

Fundamentals

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Caterpillar's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

6.8%

CAT

3.2%

US Machinery

1.3%

US Market


1 Year Return

-9.5%

CAT

1.6%

US Machinery

5.9%

US Market

Return vs Industry: CAT underperformed the US Machinery industry which returned 1.6% over the past year.

Return vs Market: CAT underperformed the US Market which returned 5.9% over the past year.


Shareholder returns

CATIndustryMarket
7 Day6.8%3.2%1.3%
30 Day-4.0%-3.8%-1.9%
90 Day-7.7%-4.6%-1.8%
1 Year-7.0%-9.5%3.8%1.6%8.3%5.9%
3 Year59.4%47.1%45.8%36.4%45.6%36.2%
5 Year58.5%36.5%59.9%40.7%66.1%47.9%

Price Volatility Vs. Market

How volatile is Caterpillar's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Caterpillar undervalued compared to its fair value and its price relative to the market?

21.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: CAT ($128.38) is trading below our estimate of fair value ($163.29)

Significantly Undervalued: CAT is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CAT is good value based on its PE Ratio (11.8x) compared to the Machinery industry average (19.6x).

PE vs Market: CAT is good value based on its PE Ratio (11.8x) compared to the US market (17.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: CAT's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CAT is overvalued based on its PB Ratio (4.9x) compared to the US Machinery industry average (2.2x).


Next Steps

Future Growth

How is Caterpillar forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

-2.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CAT's earnings are forecast to decline over the next 3 years (-2.7% per year).

Earnings vs Market: CAT's earnings are forecast to decline over the next 3 years (-2.7% per year).

High Growth Earnings: CAT's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CAT's revenue is expected to decline over the next 3 years (-1.2% per year).

High Growth Revenue: CAT's revenue is forecast to decline over the next 3 years (-1.2%).


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: CAT's Return on Equity is forecast to be very high in 3 years time (40.9%).


Next Steps

Past Performance

How has Caterpillar performed over the past 5 years?

9.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CAT's earnings have grown by 9.7% per year over the past 5 years.

Accelerating Growth: CAT's earnings growth over the past year (100.4%) exceeds its 5-year average (9.7% per year).

Earnings vs Industry: CAT earnings growth over the past year (100.4%) exceeded the Machinery industry 18.7%.


Return on Equity

High ROE: Whilst CAT's Return on Equity (42.2%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: CAT has a higher Return on Assets than the Machinery industry average last year.


Return on Capital Employed

ROCE Improving: CAT has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Caterpillar's financial position?


Financial Position Analysis

Short Term Liabilities: CAT's short term assets ($39.8B) exceeds its short term liabilities ($27.7B)

Long Term Liabilities: CAT's short term assets (39.8B) exceeds its long term liabilities (36.6B)


Debt to Equity History and Analysis

Debt Level: CAT's debt to equity ratio (244.3%) is considered high

Reducing Debt: CAT's debt to equity ratio has increased from 192.1% to 244.3% over the past 5 years.

Debt Coverage: CAT's debt is not well covered by operating cash flow (19.8%).

Interest Coverage: CAT's interest payments on its debt are well covered by EBIT (44.7x coverage).


Balance Sheet

Inventory Level: CAT has a high level of physical assets or inventory.

Debt Coverage by Assets: CAT's debt is covered by short term assets (assets are 1.094630x debt).


Next Steps

Dividend

What is Caterpillar's current dividend yield, its reliability and sustainability?

3.21%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Caterpillar before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.5%markettop25%3.8%industryaverage2.1%forecastin3Years3.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: CAT's dividend (3.21%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: CAT's dividend (3.21%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: CAT's dividends per share have been stable in the past 10 years.

Growing Dividend: CAT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (33.2%), CAT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CAT's dividends in 3 years are forecast to be well covered by earnings (33.4% payout ratio).


Next Steps

Management

What is the CEO of Caterpillar's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Jim Umpleby (61yo)

2.8yrs

Tenure

US$27,289,513

Compensation

Mr. D. James Umpleby, III, also known as Jim, has been the Chief Executive Officer and Chairman of the Board of Caterpillar Inc. since January 1, 2017 and December 12, 2018 respectively. Mr. Umpleby is a D ...


CEO Compensation Analysis

Compensation vs. Market: Jim's total compensation ($USD27.29M) is about average for companies of similar size in the US market ($USD11.20M).

Compensation vs Earnings: Jim's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.8yrs

Average Tenure

53yo

Average Age

Experienced Management: CAT's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

9.5yrs

Average Tenure

63.5yo

Average Age

Experienced Board: CAT's board of directors are considered experienced (9.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$124,82630 Oct 18
Bob De Lange
EntityIndividual
Role
Senior Key Executive
Group President of Services
Shares1,080
Max PriceUS$115.58

Ownership Breakdown


Management Team

  • Andrew R. Bonfield (56yo)

    Chief Financial Officer

    • Tenure: 1.1yrs
    • Compensation: US$7.71m
  • Jennifer Driscoll (53yo)

    Director of Investor Relations

    • Tenure: 0yrs
  • Denise Johnson (53yo)

    Group President of Resource Industries

    • Tenure: 3.5yrs
    • Compensation: US$7.20m
  • Jim Umpleby (61yo)

    Chairman of the Board & CEO

    • Tenure: 2.8yrs
    • Compensation: US$27.29m
  • Julie Lagacy (52yo)

    VP of Global Information Services (GIS) Division & Chief Information Officer

    • Tenure: 4.8yrs
  • Tom Pellette (56yo)

    Senior Vice President

    • Tenure: 0.6yrs
    • Compensation: US$9.27m
  • Karl Weiss

    CTO and Vice President of Innovation & Technology Development Division

    • Tenure: 0.4yrs
  • Bob De Lange (49yo)

    Group President of Services

    • Tenure: 2.8yrs
    • Compensation: US$7.30m
  • Suzette Long (53yo)

    Chief Legal Officer

    • Tenure: 2.8yrs
  • G. Marvel (57yo)

    Chief Accounting Officer

    • Tenure: 0.6yrs

Board Members

  • Miles White (64yo)

    Director

    • Tenure: 8.8yrs
    • Compensation: US$328.06k
  • Bill Osborn (72yo)

    Director

    • Tenure: 19.8yrs
    • Compensation: US$339.78k
  • Ed Rust (69yo)

    Director

    • Tenure: 16.8yrs
    • Compensation: US$339.04k
  • Dave Calhoun (61yo)

    Presiding Director

    • Tenure: 0.8yrs
    • Compensation: US$550.02k
  • Susan Schwab (64yo)

    Director

    • Tenure: 10.3yrs
    • Compensation: US$311.22k
  • Dan Dickinson (58yo)

    Director

    • Tenure: 13.8yrs
    • Compensation: US$330.54k
  • Debbie Reed-Klages (63yo)

    Director

    • Tenure: 4.8yrs
    • Compensation: US$304.06k
  • Juan Ignacio Gallardo Thurlow (72yo)

    Director

    • Tenure: 21.8yrs
    • Compensation: US$314.78k
  • Dennis Muilenburg (55yo)

    Director

    • Tenure: 8.8yrs
    • Compensation: US$300.06k
  • Jim Umpleby (61yo)

    Chairman of the Board & CEO

    • Tenure: 2.8yrs
    • Compensation: US$27.29m

Company Information

Caterpillar Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Caterpillar Inc.
  • Ticker: CAT
  • Exchange: NYSE
  • Founded: 1925
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: US$72.225b
  • Shares outstanding: 562.59m
  • Website: https://www.caterpillar.com

Number of Employees


Location

  • Caterpillar Inc.
  • 510 Lake Cook Road
  • Suite 100
  • Deerfield
  • Illinois
  • 60015
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CATRENXTPA (Euronext Paris)YesCommon StockFREURJan 1968
CATNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
CATSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
0Q18LSE (London Stock Exchange)YesCommon StockGBEURJan 1968
CAT1DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
CAT *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
CATZBATS-CHIXE (BATS 'Chi-X Europe')YesCommon StockGBCHFJan 1968
CAT1XTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
CATBVC (Bolsa de Valores de Colombia)YesCommon StockCOCOPJan 1968
CATSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
CATWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
CATBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP 1/5 COM USD1ARARSDec 2000
CATP34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM USD1BRBRLDec 2011

Biography

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. Its Construction Industries segment offers asphalt pavers, compactors ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 23:33
End of Day Share Price2019/10/14 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.