Is Caterpillar Stock a Good Investment?
Caterpillar Investment Advice | CAT |
- Examine Caterpillar's financial health by looking at its balance sheet, income statement, and cash flow statement. Analyze key financial ratios, such as Price-to-Earnings (P/E), Price-to-Sales (P/S), and Price-to-Book (P/B), to determine whether the stock is fairly valued or over/undervalued.
- Research Caterpillar's leadership team and their track record. Good management can help Caterpillar navigate difficult times and make strategic decisions that benefit shareholders and increases its net worth.
- Consider the overall health of the Construction Machinery & Heavy Transportation Equipment space and any emerging trends that could impact Caterpillar's business and its evolving consumer preferences.
- Compare Caterpillar's performance and market position to its competitors. Analyze how Caterpillar is positioned in terms of product offerings, innovation, and market share.
- Check if Caterpillar pays a dividend and its dividend yield and payout ratio.
- Review what financial analysts are saying about Caterpillar's stock and their price targets. However, remember that analysts' opinions can vary, and their predictions may not always be accurate.
It's important to note that investing in Caterpillar stock, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember that it's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of stock market volatility on their investments. Below is a detailed guide on how to decide if Caterpillar is a good investment.
Sell | Buy |
Strong Hold
Market Performance | OK | Details | |
Volatility | Very steady | Details | |
Hype Condition | Low key | Details | |
Current Valuation | Overvalued | Details | |
Odds Of Distress | Very Small | Details | |
Economic Sensitivity | Actively responds to the market | Details | |
Investor Sentiment | Alarmed | Details | |
Analyst Consensus | Buy | Details | |
Financial Strenth (F Score) | Strong | Details | |
Financial Leverage | Not Rated | Details | |
Reporting Quality (M-Score) | Unlikely Manipulator | Details |
Examine Caterpillar Stock
Researching Caterpillar's stock involves analyzing various aspects of the company and its industry to make an informed investment decision. The key areas to focus on are fundamentals, business model and competitive advantage. It is also important to analyze trends in revenue, net income, and cash flow, as well as key financial ratios, such as price-to-earnings (P/E), price-to-sales (P/S), and debt-to-equity (D/E). About 72.0% of the company shares are held by institutions such as insurance companies. The company has Price/Earnings To Growth (PEG) ratio of 2.77. Caterpillar recorded earning per share (EPS) of 21.53. The entity last dividend was issued on the 21st of October 2024. The firm had 2:1 split on the 14th of July 2005.
To determine if Caterpillar is a good investment, evaluating the company's potential for future growth is also very important. This may include expanding into new markets, launching new products or services, or improving operational efficiency. Companies with strong growth prospects can be more attractive investments. This aspect of the research should be conducted in the context of the overall market and industry in which the company operates and should include an analysis of growth potential, competitive landscape, and any regulatory or economic factors that could impact the business. Some of the essential points regarding Caterpillar's research are outlined below:
| Caterpillar is unlikely to experience financial distress in the next 2 years | |
| Caterpillar has a strong financial position based on the latest SEC filings | |
| About 72.0% of the company shares are held by institutions such as insurance companies | |
| On 20th of November 2024 Caterpillar paid $ 1.41 per share dividend to its current shareholders | |
| Latest headline from investing.com: Caterpillar CFO Andrew Bonfield sells 4.05m in stock |
Caterpillar Quarterly Liabilities And Stockholders Equity |
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Caterpillar uses earnings reports to provide investors with an update of all three financial statements, including the income statement, the balance sheet, and the cash flow statement. Therefore, it is also crucial when considering investing in Caterpillar. Every quarterly earnings report provides investors with an overview of sales, expenses, and net income for the most recent period. It also may provide a comparison to Caterpillar's previous reporting period. The quarterly earnings reports are usually disseminated to the public via Form 10-Q, which is a legal document filed with the Securities and Exchange Commission every quarter.
| 25th of April 2024 Upcoming Quarterly Report | View | |
| 6th of August 2024 Next Financial Report | View | |
| 31st of March 2024 Next Fiscal Quarter End | View | |
| 3rd of February 2025 Next Fiscal Year End | View | |
| 31st of December 2023 Last Quarter Report | View | |
| 31st of December 2023 Last Financial Announcement | View |
Earnings surprises can significantly impact Caterpillar's stock price both in the short term and over time. Negative earnings surprises usually result in a price decline. However, it has been seen that positive earnings surprises lead to an immediate rise in a stock's price and a gradual increase over time. This is why we often hear news about some companies beating earning projections. Financial analysts spend a large amount of time predicting earnings per share (EPS) along with other important future indicators. Many analysts use forecasting models, management guidance, and additional fundamental information to derive an EPS estimate. Below are the table of largest EPS Surprises Caterpillar's investors have experienced.
| Reported | Fiscal Date | Estimated EPS | Reported EPS | Surprise | |||
|---|---|---|---|---|---|---|---|
2002-10-16 | 2002-09-30 | 0.28 | 0.31 | 0.03 | 10 | ||
2001-07-17 | 2001-06-30 | 0.35 | 0.39 | 0.04 | 11 | ||
2001-01-18 | 2000-12-31 | 0.33 | 0.38 | 0.05 | 15 | ||
1996-10-15 | 1996-09-30 | 0.35 | 0.4 | 0.05 | 14 | ||
2003-10-16 | 2003-09-30 | 0.37 | 0.31 | -0.06 | 16 | ||
2003-04-16 | 2003-03-31 | 0.13 | 0.19 | 0.06 | 46 | ||
1997-10-15 | 1997-09-30 | 0.46 | 0.52 | 0.06 | 13 | ||
2002-07-16 | 2002-06-30 | 0.36 | 0.29 | -0.07 | 19 |
Know Caterpillar's Top Institutional Investors
Have you ever been surprised when a price of an equity instrument such as Caterpillar is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Caterpillar backward and forwards among themselves. Caterpillar's institutional investor refers to the entity that pools money to purchase Caterpillar's securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
| Shares | Fmr Inc | 2024-09-30 | 4.9 M | Bank Of America Corp | 2024-06-30 | 4.8 M | Legal & General Group Plc | 2024-06-30 | 3.9 M | Ubs Asset Mgmt Americas Inc | 2024-09-30 | 3.6 M | Goldman Sachs Group Inc | 2024-06-30 | 3.5 M | Bank Of New York Mellon Corp | 2024-06-30 | 3.4 M | Charles Schwab Investment Management Inc | 2024-09-30 | 3.2 M | Amvescap Plc. | 2024-06-30 | 3.2 M | Dimensional Fund Advisors, Inc. | 2024-09-30 | 3.1 M | Vanguard Group Inc | 2024-09-30 | 46.5 M | State Street Corp | 2024-06-30 | 36.6 M |
Caterpillar's market capitalization trends
The company currently falls under 'Mega-Cap' category with a total capitalization of 196.9 B.Market Cap |
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Caterpillar's profitablity analysis
| Last Reported | Projected for Next Year | ||
| Return On Tangible Assets | 0.13 | 0.13 | |
| Return On Capital Employed | 0.25 | 0.26 | |
| Return On Assets | 0.12 | 0.12 | |
| Return On Equity | 0.53 | 0.56 |
Determining Caterpillar's profitability involves analyzing its financial statements and using various financial metrics to determine if Caterpillar is a good buy. For example, gross profit margin measures Caterpillar's profitability after accounting for the cost of goods sold, while net profit margin measures profitability after accounting for all expenses. Other important metrics include return on assets, return on equity, and free cash flow. By reviewing multiple sources and metrics, you can gain a complete picture of Caterpillar's profitability and make more informed investment decisions.
Caterpillar's Earnings Breakdown by Geography
Please note, the imprecision that can be found in Caterpillar's accounting process means that the reasonable investor should take a skeptical approach toward the financial statement analysis of Caterpillar. Check Caterpillar's Beneish M Score to see the likelihood of Caterpillar's management manipulating its earnings.
Evaluate Caterpillar's management efficiency
Caterpillar has Return on Asset of 0.0993 % which means that on every $100 spent on assets, it made $0.0993 of profit. This is way below average. In the same way, it shows a return on shareholders' equity (ROE) of 0.5348 %, implying that it generated $0.5348 on every 100 dollars invested. Caterpillar's management efficiency ratios could be used to measure how well Caterpillar manages its routine affairs as well as how well it operates its assets and liabilities. Return On Tangible Assets is likely to gain to 0.13 in 2024. Return On Capital Employed is likely to gain to 0.26 in 2024. At this time, Caterpillar's Non Current Liabilities Other is comparatively stable compared to the past year. Change To Liabilities is likely to gain to about 426.2 M in 2024, whereas Total Current Liabilities is likely to drop slightly above 17.8 B in 2024.| Last Reported | Projected for Next Year | ||
| Book Value Per Share | 38.20 | 40.11 | |
| Tangible Book Value Per Share | 26.70 | 28.03 | |
| Enterprise Value Over EBITDA | 11.62 | 9.12 | |
| Price Book Value Ratio | 7.74 | 8.13 | |
| Enterprise Value Multiple | 11.62 | 9.12 | |
| Price Fair Value | 7.74 | 8.13 | |
| Enterprise Value | 28 B | 29.4 B |
Evaluating the management effectiveness of Caterpillar allows investors to assess its financial health and operational efficiency. Coupled with an analysis of its growth prospects and the current market dynamics, we evaluate the stock's true value and future potential. Key indicators such as revenue, earnings or debt levels are examined alongside external factors like economic trends and regulatory changes. The Caterpillar Stock analysis seeks to determine whether the stock is undervalued, appropriately priced, or overvalued, thereby guiding your investment decisions.
Dividend Yield 0.0138 | Forward Dividend Yield 0.0138 | Forward Dividend Rate 5.64 | Beta 1.095 |
Basic technical analysis of Caterpillar Stock
As of the 28th of November, Caterpillar shows the Downside Deviation of 1.64, mean deviation of 1.32, and Risk Adjusted Performance of 0.1053. Caterpillar technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices.Caterpillar's insider trading activities
Some recent studies suggest that insider trading raises the cost of capital for securities issuers and decreases overall economic growth. Trading by specific Caterpillar insiders, such as employees or executives, is commonly permitted as long as it does not rely on Caterpillar's material information that is not in the public domain. Local jurisdictions usually require such trading to be reported in order to monitor insider transactions. In many U.S. states, trading conducted by corporate officers, key employees, directors, or significant shareholders must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. In these cases Caterpillar insiders are required to file a Form 4 with the U.S. Securities and Exchange Commission (SEC) when buying or selling shares of their own companies.
Denise Johnson over three months ago Acquisition by Denise Johnson of tradable shares of Caterpillar subject to Rule 16b-3 |
Caterpillar's Outstanding Corporate Bonds
Caterpillar issues bonds to finance its operations. Corporate bonds make up one of the largest components of the U.S. bond market, which is considered the world's largest securities market. Caterpillar uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Caterpillar bonds can be classified according to their maturity, which is the date when Caterpillar has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
| CATERPILLAR FINANCIAL SERVICES Corp BondUS14913Q3B33 | View | |
| CATHOLIC HEALTH INITIATIVES Corp BondUS14916RAD61 | View | |
| CATERPILLAR INC 43 Corp BondUS149123CD18 | View | |
| CATERPILLAR INC 3803 Corp BondUS149123CB51 | View | |
| CATERPILLAR INC Corp BondUS149123CH22 | View | |
| US149123CG49 Corp BondUS149123CG49 | View | |
| CATERPILLAR INC Corp BondUS149123CF65 | View | |
| CATERPILLAR INC 475 Corp BondUS149123CE90 | View |
Understand Caterpillar's technical and predictive indicators
Using predictive indicators to make investment decisions involves analyzing Caterpillar's various financial and market-based factors to help forecast future trends and identify investment opportunities. Select the indicators that are most relevant to your investment strategy. Each indicator has its own strengths and weaknesses, so it's essential to combine multiple indicators to get a more comprehensive view of the market and reduce the risk of making poor decisions based on limited data.
| Risk Adjusted Performance | 0.1053 | |||
| Market Risk Adjusted Performance | 0.1377 | |||
| Mean Deviation | 1.32 | |||
| Semi Deviation | 1.35 | |||
| Downside Deviation | 1.64 | |||
| Coefficient Of Variation | 770.42 | |||
| Standard Deviation | 1.93 | |||
| Variance | 3.72 | |||
| Information Ratio | 0.0622 | |||
| Jensen Alpha | 0.0136 | |||
| Total Risk Alpha | (0.06) | |||
| Sortino Ratio | 0.0733 | |||
| Treynor Ratio | 0.1277 | |||
| Maximum Drawdown | 12.38 | |||
| Value At Risk | (2.13) | |||
| Potential Upside | 3.36 | |||
| Downside Variance | 2.68 | |||
| Semi Variance | 1.81 | |||
| Expected Short fall | (1.39) | |||
| Skewness | 1.3 | |||
| Kurtosis | 5.45 |
| Risk Adjusted Performance | 0.1053 | |||
| Market Risk Adjusted Performance | 0.1377 | |||
| Mean Deviation | 1.32 | |||
| Semi Deviation | 1.35 | |||
| Downside Deviation | 1.64 | |||
| Coefficient Of Variation | 770.42 | |||
| Standard Deviation | 1.93 | |||
| Variance | 3.72 | |||
| Information Ratio | 0.0622 | |||
| Jensen Alpha | 0.0136 | |||
| Total Risk Alpha | (0.06) | |||
| Sortino Ratio | 0.0733 | |||
| Treynor Ratio | 0.1277 | |||
| Maximum Drawdown | 12.38 | |||
| Value At Risk | (2.13) | |||
| Potential Upside | 3.36 | |||
| Downside Variance | 2.68 | |||
| Semi Variance | 1.81 | |||
| Expected Short fall | (1.39) | |||
| Skewness | 1.3 | |||
| Kurtosis | 5.45 |
Consider Caterpillar's intraday indicators
Caterpillar intraday indicators are useful technical analysis tools used by many experienced traders. Just like the conventional technical analysis, daily indicators help intraday investors to analyze the price movement with the timing of Caterpillar stock daily movement. By combining multiple daily indicators into a single trading strategy, you can limit your risk while still earning strong returns on your managed positions.
| Accumulation Distribution | 27917.85 | |||
| Daily Balance Of Power | (0.47) | |||
| Rate Of Daily Change | 0.99 | |||
| Day Median Price | 407.68 | |||
| Day Typical Price | 406.35 | |||
| Price Action Indicator | (6.05) | |||
| Period Momentum Indicator | (4.13) | |||
| Relative Strength Index | 49.91 |
Caterpillar Corporate Filings
F4 | 26th of November 2024 The report filed by a party regarding the acquisition or disposition of a company's common stock, as well as derivative securities such as options, warrants, and convertible securities | ViewVerify |
13A | 13th of November 2024 An amended filing to the original Schedule 13G | ViewVerify |
F3 | 7th of November 2024 The report used by insiders such as officers, directors, and major shareholders (beneficial owners holding more than 10% of any class of the company's equity securities) to declare their ownership of a company's stock | ViewVerify |
10Q | 6th of November 2024 Quarterly performance report mandated by Securities and Exchange Commission (SEC), to be filed by publicly traded corporations | ViewVerify |
Caterpillar Stock media impact
Far too much social signal, news, headlines, and media speculation about Caterpillar that are available to investors today. That information is available publicly through Caterpillar media outlets and privately through word of mouth or via Caterpillar internal channels. However, regardless of the origin, that massive amount of Caterpillar data is challenging to quantify into actionable patterns, especially for investors that are not very sophisticated with ever-evolving tools and techniques used in the investment management field.
A primary focus of Caterpillar news analysis is to determine if its current price reflects all relevant headlines and social signals impacting the current market conditions. A news analyst typically looks at the history of Caterpillar relative headlines and hype rather than examining external drivers such as technical or fundamental data. It is believed that price action tends to repeat itself due to investors' collective, patterned thinking related to Caterpillar's headlines and news coverage data. This data is often completely overlooked or insufficiently analyzed for actionable insights to drive Caterpillar alpha.
Caterpillar Sentiment by Major News Outlets
Investor sentiment, mood or attitude towards Caterpillar can have a significant impact on its stock price or the market as a whole. This sentiment can be positive or negative, and various factors, such as economic indicators, news events, or market trends, can influence it. When investor sentiment is positive, investors are more likely to buy stocks, increasing demand and increasing the stock price. Positive investor sentiment can be driven by good news about the company or the broader market, such as solid earnings reports or positive economic data.
Note that negative investor sentiment can cause investors to sell stocks, leading to a decrease in demand and a drop in the stock price. Negative sentiment can be driven by factors such as poor earnings reports, negative news about the company or industry, or broader economic concerns. It's important to note that investor sentiment is just one of many factors that can affect stock prices. Other factors, such as company performance, industry trends, and global economic conditions, can also play a significant role in determining the value of a stock.
Caterpillar Historical Investor Sentiment
Investor biases related to Caterpillar's public news can be used to forecast risks associated with an investment in Caterpillar. The trend in average sentiment can be used to explain how an investor holding Caterpillar can time the market purely based on public headlines and social activities around Caterpillar. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Caterpillar's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Caterpillar and other traded tickers. The bigger the bubble, the more accurate the estimated score. Higher bars for a given day show more participation in the average Caterpillar news discussions. The higher the estimate score, the more favorable the investor's outlook on Caterpillar.
Caterpillar Corporate Directors
| Edward Rust | Independent Director | Profile | |
| Debra ReedKlages | Independent Director | Profile | |
| Juan Gallardo | Independent Director | Profile | |
| Rayford Wilkins | Independent Director | Profile |
Additional Tools for Caterpillar Stock Analysis
When running Caterpillar's price analysis, check to measure Caterpillar's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Caterpillar is operating at the current time. Most of Caterpillar's value examination focuses on studying past and present price action to predict the probability of Caterpillar's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Caterpillar's price. Additionally, you may evaluate how the addition of Caterpillar to your portfolios can decrease your overall portfolio volatility.