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Caterpillar Inc. (CAT), founded in 1925, is a global titan of industrial machinery and innovation. Based in Irving, Texas, it drives the construction, mining, and energy sectors with advanced equipment, engines, and autonomous technologies. From colossal mining trucks to agile excavators, Caterpillar's diverse portfolio cements its leadership in heavy industries. Backed by strong financial services and a legacy of durability, Caterpillar continues to shape global infrastructure and fuel progress worldwide.
Companies worth $10 billion or more are described as “large-cap stocks,” and Caterpillar, boasting a market cap of $190.7 billion, easily qualifies it, solidifying its top-tier position in the farm and heavy construction equipment market. With a sprawling network of 2,700 dealer branches across 191 countries, Caterpillar’s reputation for unmatched quality and reliability forms the backbone of its billion-dollar empire.
Caterpillar is currently trading 5.6% below its 52-week high of $418.50, reached on Nov. 7. Yet, shares of the machinery giant gained 19.4% over the three months, outperforming the broader S&P 500 Index’s ($SPX) 12.6% gain during the same time frame.
Over the long term, CAT has gained 54.3% over the past 52 weeks, while SPX has risen 33.9% over the past year.
To confirm the recent bullish trend, CAT has traded consistently above the 200-day moving average and also the 50-day since September, with a few fluctuations.
Caterpillar’s stock stumbled on Oct. 30, slipping 2% after its Q3 earnings missed the mark. Revenue dipped 4% to $16.11 billion, hit by a 9% decline in Construction Industries due to lower sales volumes and pricing pressures. Despite the setback, Energy & Transportation saw 5% growth, fueled by power generation demand. Adjusted EPS landed at $5.17, with EBITDA down 7% year over year to $3.6 billion.
But the story did not end there - Caterpillar flexed resilience. ME&T's cash flow came in at $2.7 billion, while its full-year FCF forecast climbed to the upper end of $5 billion to $10 billion. A Dividend Aristocrat with over 30 years of growth, CAT continues rewarding investors, boasting a 1.37% yield and a 7.47% average dividend hike over five years.
Caterpillar’s dominance shines brighter compared to its top rival, Deere & Company (DE), whose stock surged 21.5% over the past 52 weeks - falling short of CAT’s stellar outperformance.
Yet, analysts urge caution despite the impressive run. The stock has a consensus rating of “Hold” – a downgrade from a “Moderate Buy” rating - from the 20 analysts in coverage, and the mean price target of $385.44 suggests the stock currently trades at a premium.
