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Fundamental analysis: Caterpillar Inc. (CAT)

Awarener score: 6.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Modest) and growth (Lacking), and the company's inclination to return cash to the stockholders (Very good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 4.5

  • Business has been slightly shrinking. It's been below average when measured against peer companies.
  • Caterpillar Inc. business trend isn't so stable. The higher the stability, the lower the risk. It looks slightly better than rivals.

Margins score: 7.0

  • CAT profit margins -on goods and services sold- are usually hardly sufficient. They stand top-notch against rival companies.
  • Business profit on sales tends to be very good. It's top tier when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually good. They remain impressive in relation to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be good in relation to total revenues. They're still top-notch against similar companies.
  • Profits -before income taxes- are usually very good considering total sales, and remain top tier when measured against rivals.
  • Total net profit tends to be good when confronted to sales. Company stands top tier when measured against comparable firms.

Growth score: 5.3

  • Caterpillar Inc. profit growth -on goods and services sold- has been almost stagnant. It's been in a weak position compared to competitors.
  • In recent years, earnings -on operations- have been growing at a very low step, which has been mediocre against comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a very low pace, which compares weak when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a slow tempo. It turns to be in a weak position compared to similar stocks.
  • In past years, profits -before income taxes- grew at a low speed. It was somewhat worse than rivals.
  • In the previous years, growth trend on total net profit has been very good, and encouraging in relation to peer companies.
  • Earnings per share have grown at a very good rhythm in past years. It's been in good shape compared to industry peers.

Miscellaneous score: 6.0

  • CAT had to pay a lot of income taxes in relation to profits made in the past years. It's been mediocre against peers.
  • Research and development expenses consume a very little portion of revenues. It's below average when measured against competitors.
  • The company grows modestly in relation to research and development efforts. It stands in a weak position compared to rival companies.

Profitability score: 9.0

  • Caterpillar Inc. usually gets excellent returns on the resources it controls. It proves more than average in relation to peer firms.
  • The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain impressive in relation to similar companies.
  • Profitability -in relation to owned resources- is usually paramount. It ranks top tier when measured against competitors.
  • In the past, got very good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 6.4

  • CAT usually uses a significant portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is abundant. It stands more than average in relation to rival firms.
  • The company is usually replacing the property, plant, and equipment that gets old, keeping its operating capabilities up to date, which is below average when measured against industry peers.
  • In the past twelve months it paid good dividends, considering the current stock price. It came somewhat better than competitors.
  • Has somewhat increased dividend payments in the past years. Business prospects may have improved. The company has behaved in a weak position compared to similar firms.
  • The company usually uses some portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects take a nosedive. Sustainability looks mediocre against comparable companies.
  • The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you 're interested in a technical explanation. It stands excellent in relation to rivals.
  • The company uses a large portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks substantially worse when measured against competitors.

Balance Sheet score: 4.3

  • Caterpillar Inc. intangible assets (like brands and goodwill) represent some portion of resources controlled, according to accounting books. There could be some difficulties in liquidating them if the company ever gets in financial distress. It happens to be below average when measured against peer companies.
  • The company has somewhat more short-term resources than short-term obligations. Liquidity concerns might not be that important. It turns to be a disappointment compared to similar firms.
  • A significant part of resources controlled were provided for with financial debt. Creditors have almost as many claims on the company as shareholders. It remains worse than most rival firms.
  • Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks weak when measured against rivals.
  • For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's lacking compared to peer firms.
  • For every dollar of short-term obligations, the company has few cents of cash and equivalents, which is somewhat worse than similar enterprises.
  • Usually, sales are on somewhat more than three months credit. It still ranks weak when measured against peers.
  • Normally has approximately five months of sales worth in inventory. It comes up as in a weak position compared to competitors.
  • On average, it takes a lot of months from the purchase to charging customers. It happens to be worse than most peers.
  • On average pays suppliers approximately three months after the purchase. It ranks more than average in relation to industry peers.
  • The company pays its suppliers six months or more before charging its customers, so there's abundant money invested in working capital. It's in a very weak position compared to similar companies.
  • Net interest expenses consume a slight portion of usual business earnings, and are very easily bearable. It stands well ranked against rival firms.
  • Business earnings have usually been reasonable when measured against loans taken. Cutting back reinvesting in the business, it could take more than five years to repay the obligations with current profitability. It ranks similar to comparable enterprises.
  • Revenues are reasonable in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks in a weak position compared to similar firms.
  • Resource exploitation is quite good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still mediocre against peer companies.

Valuation score: 5.8

  • Caterpillar Inc. looks somewhat expensive in relation to profits and financial position. It happens to be similar to competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a very weak position compared to peers.
  • In the past twelve months, the company generated some slightly better free funds in relation to the stock price, which stands somewhat worse than similar companies.
  • The company usually generates reasonably more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be fair. It's still almost average when measured against industry firms.
  • In the past twelve months, the company has slightly rewarded investors, considering both dividends and share on the pie of earnings. It came up in good shape compared to peer ventures.
  • The company is indebted, it should focus on loan repayment. It looks somewhat worse than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks encouraging in relation to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a very weak position compared to rival firms.
  • The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains worse than most peer firms.
  • In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be almost average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a very good earnings power ability when measured against the current stock price and financial position. It's still rather normal in relation to peer companies.

Total score: 6.0


CAT logos

Company at a glance: Caterpillar Inc. (CAT)

Sector, industry: Industrials, Farm & Heavy Construction Machinery

Market Cap: 86.70 billions

Revenues TTM: 52.67 billions

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. Its Construction Industries segment offers asphalt pavers, backhoe loaders, compactors, cold planers, compact track and multi-terrain loaders, excavators, motorgraders, pipelayers, road reclaimers, site prep tractors, skid steer loaders, telehandlers, and utility vehicles; mini, small, medium, and large excavators; compact, small, and medium wheel loaders; track-type tractors and loaders; and wheel excavators. The Resource Industries segment provides electric rope shovels, draglines, hydraulic shovels, rotary drills, hard rock vehicles, track-type tractors, mining trucks, longwall miners, wheel loaders, off-highway trucks, articulated trucks, wheel tractor scrapers, wheel dozers, fleet management, landfill compactors, soil compactors, machinery components, autonomous ready vehicles and solutions, select work tools, and safety services and mining performance solutions. The Energy & Transportation segment offers reciprocating engines, generator sets, integrated systems and solutions, turbines and turbine-related services, remanufactured reciprocating engines and components, centrifugal gas compressors, diesel-electric locomotives and components, and other rail-related products and services for marine, oil and gas, industrial, and electric power generation sectors. The company's Financial Products segment provides operating and finance leases, installment sale contracts, working capital loans, and wholesale financing plans; and insurance and risk management products for vehicles, power generation facilities, and marine vessels. The All Other operating segment manufactures filters and fluids, undercarriage, ground engaging tools, etc. The company was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Deerfield, Illinois.

Awarener score: 6.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Modest) and growth (Lacking), and the company's inclination to return cash to the stockholders (Very good).