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Caterpillar (CAT) Dividend Stock Analysis
Caterpillar Dividend
The Caterpillar dividend has been paid quarterly since 1933 and increased for 31 consecutive years; qualifying the company as a Dividend Aristocrat and Dividend Champion.
Current Dividend Annualized: $5.64
Caterpillar (CAT) Intrinsic Value – Margin of Safety Analysis
(updated March 2025)
Normalized Diluted Earnings Per Share (TTM): $22.05
Free Cash Flow Per Share (TTM): $18.02
Cash Flow From Operations (CFO) Per Share (TTM): $24.59
Estimated Intrinsic Value: $241
Target Buy Price Based on Required Margin of Safety = $201
(Required Margin of Safety Based On Risk Stability Grade:
A = 0%, B = 20%, C = 40%, D = 60%, F = 80%)
Target SELL Price Based on Estimated Intrinsic Value = $301
(Allow Overvaluation Adjusted by Risk Stability Grade:
A = 40%, B = 25%, C = 15%, D = 5%, F = 0%)
Risk / Stability Grade: B
A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.
B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.
C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.
D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.
F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.
Financial Risk Grade: B
A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.
B grade indicates a very low probability for a dividend cut.
C grade indicates a low probability for a dividend cut and/or average safety risk.
D grade indicates there are issues that should be considered concerning future dividend payments.
F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.
Business Quality Grade: B
A grade indicates earnings quality is high or far above average.
B grade indicates earnings quality is good and/or above average.
C grade indicates earnings quality is acceptable or average.
D grade indicates earnings quality is poor and requires thoughtful due diligence.
F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.
Earnings Report: 12/31/24
AAAMP Portfolios Position Disclosures:
Treasure Trove Dividend (TTD) – None
Global Dividend Value (GDV) – None
Dividend Growth & Income (DGI) – None
Global Value (GV) – None
Global Value Aggressive (GVA) – None
Global Conservative Income (GCI) – None
Global High Income (GHI) – None
Company Description
Sector: Industrials
Industry: Farm & Construction Equipment
Company Overview:
Caterpillar Inc. (CAT) is a leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and locomotives. The company operates through its key segments: Construction Industries, Resource Industries, Energy & Transportation, and Financial Products. With a global footprint, Caterpillar provides essential machinery and services for infrastructure development, mining, and energy production.
Company Strengths:
Caterpillar’s strengths include its dominant market position, strong brand reputation, and broad product portfolio that serves multiple industries worldwide. The company benefits from a robust dealer network that provides aftermarket parts and services, generating a steady stream of recurring revenue. Additionally, Caterpillar’s investment in technology, such as autonomous and connected machinery, enhances efficiency and maintains its competitive edge.
Company Challenges:
Caterpillar faces challenges such as cyclical demand in construction and mining, which can lead to revenue fluctuations during economic downturns. Supply chain disruptions, rising material costs, and labor shortages also impact profitability. Furthermore, the company must navigate regulatory and environmental pressures as the industry shifts toward lower-emission and sustainable equipment solutions.
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Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.