Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Caterpillar Inc. (CAT)

Company Dividend Discount ModelIndustry: Agricultural - MachinerySector: Industrials

Valuation Snapshot

Stable Growth$445.84 - $1,194.16$683.84
Multi-Stage$579.42 - $636.24$607.29
Blended Fair Value$645.56
Current Price$477.15
Upside35.30%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.41%5.03%5.555.385.124.894.714.474.093.843.783.69
YoY Growth--3.24%5.04%4.63%3.97%5.21%9.28%6.55%1.78%2.39%8.46%
Dividend Yield--1.68%1.48%2.24%2.20%2.03%3.86%2.92%2.61%4.07%4.82%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)9,263.00
(-) Cash Dividends Paid (M)2,723.00
(=) Cash Retained (M)6,540.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,852.601,157.88694.73
Cash Retained (M)6,540.006,540.006,540.00
(-) Cash Required (M)-1,852.60-1,157.88-694.73
(=) Excess Retained (M)4,687.405,382.135,845.28
(/) Shares Outstanding (M)476.53476.53476.53
(=) Excess Retained per Share9.8411.2912.27
LTM Dividend per Share5.715.715.71
(+) Excess Retained per Share9.8411.2912.27
(=) Adjusted Dividend15.5517.0117.98
WACC / Discount Rate5.99%5.99%5.99%
Growth Rate2.41%3.41%4.41%
Fair Value$445.84$683.84$1,194.16
Upside / Downside-6.56%43.32%150.27%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)9,263.009,579.289,906.3610,244.6010,594.4010,956.1411,284.82
Payout Ratio29.40%41.52%53.64%65.76%77.88%90.00%92.50%
Projected Dividends (M)2,723.003,977.055,313.566,736.718,250.849,860.5210,438.46

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate5.99%5.99%5.99%
Growth Rate2.41%3.41%4.41%
Year 1 PV (M)3,716.123,752.413,788.69
Year 2 PV (M)4,639.214,730.254,822.17
Year 3 PV (M)5,495.855,658.415,824.15
Year 4 PV (M)6,289.476,538.746,795.35
Year 5 PV (M)7,023.367,373.017,736.45
PV of Terminal Value (M)248,943.34261,336.74274,218.88
Equity Value (M)276,107.34289,389.55303,185.69
Shares Outstanding (M)476.53476.53476.53
Fair Value$579.42$607.29$636.24
Upside / Downside21.43%27.27%33.34%

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