Caterpillar Inc
🇺🇸 CAT · NYSE/NASDAQ · US1491231015
Industrials
USD 717.22 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
37.9
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 717.22 ÷ 18.92 = 37.9
TTM period through: 2025-12-31
Forward P/E (estimated): 31.7
Based on analyst estimates
Reference: Provider P/E (Trailing): 38.2
Yield (Fwd)
0.84%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 0.81%
Net Debt/EBITDA (TTM)
2.2x
Latest quarter: 8.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 8.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
31.9%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 31.0%
Cash Flow Payout (TTM): 23.4%
FCF Coverage (TTM): 3.74x
ROE
43.5%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
25.7x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Caterpillar is the undisputed global leader in heavy construction and mining equipment, boasting a massive competitive moat and exceptional profitability. While the underlying business quality is outstanding and the dividend is highly secure, current valuation multiples are extremely elevated and offer limited upside. Existing shareholders should maintain positions given the phenomenal fundamentals, but the sub-1% yield and peak valuation mean new investors should wait for a substantial pullback before considering an entry.
Sector Context
Caterpillar is the world's leading manufacturer of heavy machinery, off-highway diesel engines, and industrial gas turbines used in construction, mining, and energy. While industrial manufacturing is inherently cyclical and sensitive to global macroeconomic conditions, Caterpillar's extensive global dealer network and high-margin aftermarket parts business provide a recurring cash flow base that supports long-term dividend stability.
📊 Strategy Analysis
- • Outstanding business fundamentals evidenced by a 43.53% ROE and a flawless 10-year record of consistent dividend growth without any cuts
- • The dividend is exceptionally secure, supported by a conservative 31.13% payout ratio and strong free cash flow coverage of 3.74x
- • Undisputed global leadership and wide competitive moat in heavy machinery, enhanced by recent robust demand for power-generation equipment tied to AI data centers
⚠ What to Watch
- • Current valuation is severely stretched with a trailing P/E of 37.91x, far exceeding the strategy's target range of 8-15x
- • The 0.81% dividend yield falls significantly short of the 3% minimum requirement for income-focused dividend strategies
- • Recent 8-quarter trajectory indicates declining earnings amidst margin compression, introducing risk to the current premium multiple if cyclical headwinds persist
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.