Caterpillar (NYSE:CAT – Get Free Report) is one of 436 public companies in the “Machinery” industry, but how does it contrast to its rivals? We will compare Caterpillar to related companies based on the strength of its institutional ownership, risk, valuation, profitability, analyst recommendations, dividends and earnings.
Profitability
This table compares Caterpillar and its rivals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Caterpillar | 15.21% | 59.87% | 11.99% |
| Caterpillar Competitors | -1,044.42% | -14.99% | 0.57% |
Insider & Institutional Ownership
71.0% of Caterpillar shares are owned by institutional investors. Comparatively, 51.7% of shares of all “Machinery” companies are owned by institutional investors. 0.3% of Caterpillar shares are owned by insiders. Comparatively, 14.2% of shares of all “Machinery” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
Caterpillar has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500. Comparatively, Caterpillar’s rivals have a beta of 5.11, indicating that their average stock price is 411% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations for Caterpillar and its rivals, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Caterpillar | 0 | 12 | 15 | 0 | 2.56 |
| Caterpillar Competitors | 4195 | 14693 | 18192 | 804 | 2.41 |
Caterpillar currently has a consensus target price of $898.25, suggesting a potential upside of 51.90%. As a group, “Machinery” companies have a potential upside of 31.44%. Given Caterpillar’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Caterpillar is more favorable than its rivals.
Dividends
Caterpillar pays an annual dividend of $6.52 per share and has a dividend yield of 1.1%. Caterpillar pays out 25.6% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.8% and pay out 24.6% of their earnings in the form of a dividend. Caterpillar has raised its dividend for 30 consecutive years. Caterpillar lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.
Earnings and Valuation
This table compares Caterpillar and its rivals top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Net Income | Price/Earnings Ratio | |
| Caterpillar | $67.59 billion | $8.88 billion | 23.20 |
| Caterpillar Competitors | $4.64 billion | $364.05 million | 3.93 |
Caterpillar has higher revenue and earnings than its rivals. Caterpillar is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.
Summary
Caterpillar beats its rivals on 10 of the 15 factors compared.
Caterpillar Company Profile
Caterpillar Inc. manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools. The company's Resource Industries segment provides electric rope and hydraulic shovels, draglines, rotary drills, hard rock vehicles, tractors, mining trucks, wheel loaders, off-highway and articulated trucks, wheel tractor scrapers and dozers, fleet management products, landfill and soil compactors, machinery components, autonomous ready vehicles and solutions, work tools, and safety services and mining performance solutions, as well as related parts and services. Its Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines, drivetrain, and integrated systems and solutions; turbines, centrifugal gas compressors, and related services; and diesel-electric locomotives and components, and other rail-related products. The company's Financial Products segment provides operating and finance leases, installment sale contracts, revolving charge accounts, repair/rebuild financing services, working capital loans, and wholesale financing; and insurance and risk management products and services. Its All Other Operating segment offers filters and fluids, undercarriage, ground engaging tools, fluid transfer products, precision seals, and rubber sealing and connecting components; parts distribution; logistics solutions and distribution services; brand management and marketing strategy services; and digital investments services. Caterpillar Inc. was founded in 1925 and is headquartered in Irving, Texas.
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