Construction Machinery & Equip
Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company operates through its three primary segments: Construction Industries, Resource Industries and Energy & Transportation. It also provides financing and related services through its Financial Products segment. Its Construction Industries is engaged in supporting customers using machinery in infrastructure, forestry and building construction. Its Resource Industries is engaged in supporting customers using machinery in mining, heavy construction, and quarry and aggregates. Its Energy & Transportation, which supports customers in oil and gas, power generation, marine, rail and industrial applications, including Caterpillar machines. Its All Other operating segment, which includes activities, such as product management and development, manufacturing of filters and fluids, undercarriage, ground-engaging tools, and others.
Discounted Cash Flow Valuation of Caterpillar Inc
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +9.23%.
The trend of Net Margin over the past 5 years is +1.38%.
The average ROA over the past 5 years is +8.44%.
The trend of ROA over the past 5 years is +0.23%.
The average ROE over the past 5 years is +31.96%.
The trend of ROE over the past 5 years is +4.24%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is -.
The trend of Debt/FCF over the past 5 years is -0.21.
Graham’s Stability measure stands at -0.02.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +5.5%.
The trend of Revenue growth rate over the past 5 years is +2.53%.
The Earnings CAGR over the past 5 years is +54.81%.
The trend of Earnings growth rate over the past 5 years is +1.55%.
The Equity CAGR over the past 5 years is +2.91%.
The trend of Equity growth rate over the past 5 years is +2.53%.
The FCF CAGR over the past 5 years is +6.12%.
The trend of FCF growth rate over the past 5 years is +3.32%.