Caterpillar Valuation
| CAT Stock | USD 359.88 4.03 1.11% |
At this time, the firm appears to be overvalued. Caterpillar shows a prevailing Real Value of $347.49 per share. The current price of the firm is $359.88. Our model approximates the value of Caterpillar from analyzing the firm fundamentals such as Return On Equity of 0.58, current valuation of 212.18 B, and Profit Margin of 0.15 % as well as examining its technical indicators and probability of bankruptcy. In general, most investors favor acquiring undervalued instruments and selling overvalued instruments since, at some point, asset prices and their ongoing real values will blend. Key fundamental drivers impacting Caterpillar's valuation include:
Price Book 9.3663 | Enterprise Value 212.2 B | Enterprise Value Ebitda 13.5936 | Price Sales 2.7227 | Forward PE 17.2117 |
Overvalued
Today
Please note that Caterpillar's price fluctuation is very steady at this time. Calculation of the real value of Caterpillar is based on 3 months time horizon. Increasing Caterpillar's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Caterpillar is useful when determining the fair value of the Caterpillar stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Caterpillar. Since Caterpillar is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Caterpillar Stock. However, Caterpillar's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value. | Historical | Market 359.88 | Real 347.49 | Target 284.95 | Hype 361.43 |
The real value of Caterpillar Stock, also known as its intrinsic value, is the underlying worth of Caterpillar Company, which is reflected in its stock price. It is based on Caterpillar's financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Caterpillar's stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Caterpillar's stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
Estimating the potential upside or downside of Caterpillar helps investors to forecast how Caterpillar stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Caterpillar more accurately as focusing exclusively on Caterpillar's fundamentals will not take into account other important factors: Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Caterpillar's intrinsic value based on its ongoing forecasts of Caterpillar's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Caterpillar's closest peers. When choosing an evaluation method for Caterpillar, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.
Caterpillar Investments |
|
Caterpillar Valuation Trend
Knowing Caterpillar's actual value is paramount for traders to make sound investment determinations. Caterpillar's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Caterpillar's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Caterpillar's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.
Caterpillar Market Cap
Caterpillar is number one stock in market capitalization category among related companies. Market capitalization of Industrials industry is currently estimated at about 396.89 Billion. Caterpillar totals roughly 181.73 Billion in market capitalization claiming about 46% of equities under Industrials industry.Caterpillar Valuation Ratios as Compared to Competition
Comparative valuation techniques use various fundamental indicators to help in determining Caterpillar's current stock value. Our valuation model uses many indicators to compare Caterpillar value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Caterpillar competition to find correlations between indicators driving Caterpillar's intrinsic value. More Info.Caterpillar is rated below average in price to earning category among related companies. It is number one stock in price to book category among related companies fabricating about 0.55 of Price To Book per Price To Earning. The ratio of Price To Earning to Price To Book for Caterpillar is roughly 1.83 . Price To Book Ratio is likely to gain to 8.13 in 2024. Comparative valuation analysis is a catch-all model that can be used if you cannot value Caterpillar by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Caterpillar's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Caterpillar's earnings, one of the primary drivers of an investment's value.Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Caterpillar's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Caterpillar and how it compares across the competition.
About Caterpillar Valuation
The stock valuation mechanism determines the current worth of Caterpillar on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Caterpillar. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Caterpillar based exclusively on its fundamental and basic technical indicators. By analyzing Caterpillar's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Caterpillar's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Caterpillar. We calculate exposure to Caterpillar's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Caterpillar's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 23.5 B | 24.6 B | |
| Pretax Profit Margin | 0.19 | 0.20 | |
| Operating Profit Margin | 0.21 | 0.22 | |
| Net Profit Margin | 0.15 | 0.16 | |
| Gross Profit Margin | 0.35 | 0.22 |
Caterpillar Quarterly Retained Earnings |
|
8 Steps to conduct Caterpillar's Valuation Analysis
Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Caterpillar's potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Caterpillar's valuation analysis, follow these 8 steps:- Gather financial information: Obtain Caterpillar's financial statements, including balance sheets, income statements, and cash flow statements.
- Determine Caterpillar's revenue streams: Identify Caterpillar's primary sources of revenue, including products or services offered, target markets, and pricing strategies.
- Analyze market data: Research Caterpillar's industry and market trends, including the size of the market, growth rate, and competition.
- Establish Caterpillar's growth potential: Evaluate Caterpillar's management, business model, and growth potential.
- Determine Caterpillar's financial performance: Analyze its financial statements to assess its historical performance and future potential.
- Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
- Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Caterpillar's estimated value.
- Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
A single share of Caterpillar represents a small ownership stake in the entity. As a stockholder of Caterpillar, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.
Caterpillar Dividends Analysis For Valuation
At this time, Caterpillar's Dividend Yield is comparatively stable compared to the past year. Dividend Payout Ratio is likely to gain to 0.26 in 2024, despite the fact that Dividends Paid is likely to grow to (2.4 B). . At this time, Caterpillar's Retained Earnings are comparatively stable compared to the past year. Price Earnings Ratio is likely to gain to 15.34 in 2024, whereas Retained Earnings Total Equity is likely to drop slightly above 34 B in 2024.
| Last Reported | Projected for Next Year | ||
| Dividends Paid | -2.6 B | -2.4 B | |
| Dividend Yield | 0.02 | 0.02 | |
| Dividend Payout Ratio | 0.25 | 0.26 | |
| Dividend Paid And Capex Coverage Ratio | (24.36) | (23.14) |
There are various types of dividends Caterpillar can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Caterpillar shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Caterpillar directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Caterpillar pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Caterpillar by the value of the dividends paid out.
Caterpillar Growth Indicators
Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Caterpillar does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
| Common Stock Shares Outstanding | 513.6 M | |
| Quarterly Earnings Growth Y O Y | 0.893 | |
| Forward Price Earnings | 17.2117 |
Caterpillar Current Valuation Indicators
Valuation refers to the process of determining the present value of Caterpillar and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Caterpillar we look at many different elements of the entity such as Caterpillar's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Caterpillar's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Caterpillar's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Caterpillar, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Caterpillar's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Caterpillar's worth.When determining whether Caterpillar is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Caterpillar Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Caterpillar Stock. Highlighted below are key reports to facilitate an investment decision about Caterpillar Stock: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Caterpillar. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in nation. For more information on how to buy Caterpillar Stock please use our How to Invest in Caterpillar guide.Note that the Caterpillar information on this page should be used as a complementary analysis to other Caterpillar's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Complementary 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.
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |
Is Caterpillar's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Caterpillar. If investors know Caterpillar will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Caterpillar listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.893 | Dividend Share 5.1 | Earnings Share 20.12 | Revenue Per Share 131.336 | Quarterly Revenue Growth 0.029 |
The market value of Caterpillar is measured differently than its book value, which is the value of Caterpillar that is recorded on the company's balance sheet. Investors also form their own opinion of Caterpillar's value that differs from its market value or its book value, called intrinsic value, which is Caterpillar's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Caterpillar's market value can be influenced by many factors that don't directly affect Caterpillar's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Caterpillar's value and its price as these two are different measures arrived at by different means. Investors typically determine if Caterpillar is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Caterpillar's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.