industrial goods sector
Post on 30-Dec-2015
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Industrial Goods Sector
Christian Fleming, MDAlexandra Smith, Analyst
Kairavi Mehta, AnalystVani Patro, Analyst
Company Description
Caterpillar Inc. manufactures, remanufactures, and provides logistical services for many industries. Caterpillar offers tools and machinery for heavy construction, forestry, excavation, and systems and solutions for the marine and petroleum industries.
Caterpillar Inc. – Capital IQ
Company Sectors
Construction Mining Engines and Turbine
Company Basic Information
Company Name
Caterpillar Inc.
Ticker CAT
Current Price (11/04/12)
$85.79 -1.86 (-2.12%)
52 week range
$78.25 - $116.95
Target Price $105.00
Google Finance
Historic Price Chart
Company SWOT AnalysisFavorable Unfavorable
Internal Strengths:•Leading market position•Strong portfolio of brands•Wide logistics
Weaknesses:•High debt to equity ratio
External Opportunities:•Acquisitions in capital intensive industries•Strategic alliances and investments•Growing presence in China and India
Threat:•Increase in raw material costs•Strong competition •Foreign exchange and interest rate fluctuations
Key Figures
Stock Analysis
Caterpillar Inc.
Komatsu Ltd. Industry
P/E Ratio 8.79 11.92 17.21
Market Cap
$56.1B $20.90B $907.9M
EPS 9.76 1.84
Beta 1.83 1.40
Growth and Margin Analysis
2010 2011 2012
Sales Growth
31.5% 41.2% 20.4%
Gross Margin
26.5% 26.2% 27.3%
Profit Margin
6.3% 8.2% 9.7%
2010 2011 2012
Sales Growth
28.7% 7.5% (2.2)%
Gross Margin
27.1% 27.3% 27.0%
Profit Margin
8.2% 8.4% 7.2%
2010 2011 2012
Sales Growth
22.1% 8.0% 10.4%
Gross Margin
12.8% 13.3% 11.8%
Profit Margin 5.4% 5.5% 3.9%
Machinery-Construction & Mining
Profitability and Turnover
2010 2011 2012
ROIC 6.3% 10.2% 11.1%
ROE 26.7% 40.3% 40.3%
ROA 4.1% 6.2% 7.1%
Total Asset Turnover
0.7x 0.8x 0.8x
Cash conversion cycle
111.0 107.0 121.2
2010 2011 2012
ROIC 3.5% 9.8% 10.1%
ROE 4.8.% 17.1% 17.4%
ROA 2.6% 7.1% 7.3%
Asset Turn
0.7x 0.9x 0.9x
CCC 176.8 149.0 171.4
2010 2011 2012
ROIC 5.9% 7.2% 9.4%
ROE 12.2% 13.7% 10.0%
ROA 3.4% 4.4% 5.8%
Total Asset Turnover
0.7x 0.8x 0.8x
Cash conversion cycle
29.4 32.1 31.3
Machinery-Construction & Mining
Leverage and Liquidity
2010 2011 2012
Debt/equity
56.0% 61.4% 58.7%
Debt/Assets
54.7% 54.4% 52.1%
Quick Ratio
0.8x 0.7x 0.7x
Current ratio
1.6x 1.6x 1.6x
2010 2011 2012
Debt/ Equity 251.2% 258.2% 222.2%
Debt/ Asset 82.3% 83.5% 80.2%
Quick Ratio 0.9x 0.7x 0.8x
Current Ratio
1.4x 1.3x 1.4x
2010 2011 2012
Debt/ Equity 89.0% 59.1% 57.4%
Debt/ Asset 70.1% 62.4% 63.1%
Quick Ratio 1.7x 1.7x 1.6x
Current Ratio 0.9x 0.9x 1.0x
Machinery-Construction & Mining
Analyst Opinions
Recommendation
Buy 100 shares
1.Caterpillar has a low P/E ratio in comparison to competitors and industry with high earnings per share.
2.Analysts have deemed the stock overweight, indicating that it is out performing the industry
3.It has a history of immense growth, depicted by the revenue growth.
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