Caterpillar (NYSE:CAT) Trading Up 3.2% - Should You Buy?

Key Points

• Caterpillar shares rose 3.2% to $883.90 in midday trading, though volume was 28% below the average session level.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and an average price target of $995.52; several firms recently raised their targets.
• Caterpillar delivered a strong quarter, reporting $8.17 in EPS and $20.54 billion in revenue, while revenue increased 23.7% year over year. The company also raised its quarterly dividend to $1.63 per share, yielding about 0.7%.

Caterpillar Inc. (NYSE:CAT - Get Free Report)'s stock price shot up 3.2% on Monday . The company traded as high as $887.91 and last traded at $883.90. 2,084,754 shares were traded during mid-day trading, a decline of 28% from the average session volume of 2,913,972 shares. The stock had previously closed at $856.57.

Analyst Upgrades and Downgrades

Several research firms have recently commented on CAT. Bank of America raised their target price on shares of Caterpillar from $930.00 to $989.00 and gave the stock a "buy" rating in a research note on Friday, May 1st. Citigroup increased their price target on shares of Caterpillar from $1,020.00 to $1,100.00 and gave the stock a "buy" rating in a report on Tuesday, July 14th. Wells Fargo & Company raised their price objective on shares of Caterpillar from $1,050.00 to $1,155.00 and gave the company an "overweight" rating in a research report on Tuesday, June 23rd. Robert W. Baird set a $970.00 target price on Caterpillar in a research report on Wednesday, August 5th. Finally, UBS Group increased their target price on Caterpillar from $900.00 to $925.00 and gave the stock a "neutral" rating in a research note on Wednesday, August 5th. One analyst has rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and eleven have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, Caterpillar presently has an average rating of "Moderate Buy" and an average target price of $995.52.

Caterpillar Stock Performance

The firm has a fifty day moving average of $915.09 and a 200-day moving average of $827.86. The company has a quick ratio of 0.85, a current ratio of 1.37 and a debt-to-equity ratio of 1.65. The stock has a market capitalization of $406.30 billion, a price-to-earnings ratio of 38.03, a PEG ratio of 1.53 and a beta of 1.60.

Caterpillar (NYSE:CAT - Get Free Report) last announced its earnings results on Tuesday, August 4th. The industrial products company reported $8.17 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $6.22 by $1.95. The company had revenue of $20.54 billion during the quarter, compared to analysts' expectations of $19.34 billion. Caterpillar had a net margin of 14.51% and a return on equity of 55.53%. The firm's quarterly revenue was up 23.7% compared to the same quarter last year. During the same quarter in the previous year, the business posted $4.72 earnings per share. As a group, sell-side analysts anticipate that Caterpillar Inc. will post 26.56 EPS for the current year.

Caterpillar Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, August 19th. Stockholders of record on Monday, July 20th will be issued a dividend of $1.63 per share. This represents a $6.52 annualized dividend and a dividend yield of 0.7%. This is a positive change from Caterpillar's previous quarterly dividend of $1.51. The ex-dividend date is Monday, July 20th. Caterpillar's payout ratio is 28.06%.

Hedge Funds Weigh In On Caterpillar

A number of large investors have recently bought and sold shares of the stock. BlackRock Inc. acquired a new stake in Caterpillar in the second quarter valued at $40,457,153,000. Bank of America Corp DE bought a new position in Caterpillar in the second quarter worth about $5,818,150,000. Diamant Asset Management Inc. boosted its position in Caterpillar by 68,427.2% during the 1st quarter. Diamant Asset Management Inc. now owns 3,140,603 shares of the industrial products company's stock valued at $2,224,992,000 after purchasing an additional 3,136,020 shares during the period. Bank of New York Mellon Corp bought a new stake in Caterpillar in the second quarter valued at $3,192,710,000. Finally, Legal & General Group Plc acquired a new position in Caterpillar during the 2nd quarter valued at about $2,783,451,000. Hedge funds and other institutional investors own 70.98% of the company's stock.

Caterpillar Company Profile

Caterpillar Inc is a global manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and locomotives. The company's product portfolio includes earthmoving machines such as excavators, bulldozers, wheel loaders and off‑highway trucks, as well as a range of power generation products including generator sets and power systems for industrial and commercial use. Caterpillar serves customers across heavy construction, mining, energy, transportation and related industries with both equipment and integrated technology solutions.

In addition to manufacturing, Caterpillar provides a broad range of aftermarket parts and support services, including maintenance, repair, remanufacturing and fleet management tools.

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