Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, heavy equipment giant Caterpillar
With that in mind, let's take a closer look at Caterpillar's business and see what CAPS investors are saying about the stock right now.
Caterpillar facts
| Headquarters (Founded) | Peoria, Ill. (1925) |
| Market Cap | $52.67 billion |
| Industry | Farm and construction machinery |
| Trailing-12-Month Revenue | $51.1 billion |
| Management | Chairman/CEO Douglas Oberhelman CFO Edward Rapp |
| Return on Equity (Average, Past 3 Years) | 24.2% |
| Cash/Debt | $9.5 billion / $34.4 billion |
| Dividend Yield | 2.3% |
| Competitors |
Deere CNH Global Terex |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 94% of the 5,675 members who have rated Caterpillar believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars dspl4Js and TSIF, both of whom are ranked in the top 5% of our community.
Just last month, dspl4js tapped Caterpillar as a clear bargain opportunity:
Tremendous earnings power. Cat is only beginning to realize profit from its Bucyrus aquisition. The stock has been beaten down too much. I beleive it has the capability to earn $10.00 per share. Put a 15 PE, and there you go. It is worth waiting for an easy double.
Over the next five years, in fact, Caterpillar is expected to grow its bottom line at a brisk rate of 23% annually. That's faster than competitors Deere (13%), CNH (14%), and Terex (4%).
CAPS All-Star TSIF elaborates on the Caterpillar bull case:
Major purchases were put off during the recession, but this just lead to older, less productive equipment in the field. The earthquakes, tornados, floods, and possibly soon hurricanes will continue to place a heavy demand on the equipment Caterpillar, Inc is famous for. ...
Debt load is high, but this is due to their financing division and is well supported by cash flow. ... Caterpillar, Inc is not afraid to find areas internationally to grow and they are currently looking to expand in countries such as China, India and Brazil where infrastructure spending is forecast to increase.
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