Caterpillar vs. Peers: Fundamental Analysis
We focus today on Industrials, in particular on Heavy Machinery and Vehicles, with two articles: this one on Caterpillar, Inc. (NYSE: CAT) and an Earnings Analysis on Deere & Company (NYSE: DE). In July, Caterpillar, Inc. (NYSE: CAT) cut its revenue and earnings guidance. Yesterday, rival Joy Global (NYSE: JOY) discussed its earnings for Q3 2013, reporting net sales of $1.3 billion compared to $1.4 billion a year ago. Deere & Company came out with its F3 Q2013 earnings in mid-August and announced quarterly dividends of $.51 a share yesterday.
Let's take a closer look at Caterpillar, Inc. one of the largest companies in its peer group. We analyze the company's growth expectations and capital investment strategy relative to its peers (full peer set at the end of this post).
Get performance characteristics and key ratios for Caterpillar and peers with this full report!
Share Price Performance
Relative underperformance over the last year and the last month suggest a lagging position.
Caterpillar's share price performance of -4.1% for the last 12 months is below its peer median. The 30-day trend in its share price performance of 0.5% is also below the peer median implying that the company's stock performance is lagging its peers. (See report for chart)
The market likely has some questions about the company's long-term strategy.
Caterpillar's annualized rate of change in capital of 12.6% over the past three years is less than its peer median of 18.2%. This investment has generated a peer median return on capital of 9.7% averaged over the same three years. The median return on capital investment on a relatively lower investment suggests that the company is under investing.
Deere & Company(DE), Cummins Inc.(CMI), Komatsu Ltd. Sponsored ADR(KMTUY), Fiat Industrial SpA(FI), CNH Global NV(CNH), Sany Heavy Industry Co., Ltd. Class A(600031), Zoomlion Heavy Industry Science & Technology Co. Ltd. Class A(000157), and Joy Global Inc.(JOY).
Sector: Producer Manufacturing. Industry Group: Trucks/Construction/Farm Machinery
Are Caterpillar's returns sustainable? What are its drivers of margin? Answer these and other questions with our Fundamental Analysis.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.