Caterpillar (CAT)
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Caterpillar (CAT) makes and sells all those big yellow trucks and heavy equipment that we’d all love to drive–at least once. They sell to users in construction (54%), mining (22%), and various other industries including quarrying, paving, forestry, etc. They also sell diesel engines, natural gas engines, and gas turbines. They also remanufacture engines–both their own and others’. Finally, they do a whole lot more that you may want to check out at their web site. To quote them, though, “Caterpillar has grown to be the world’s largest maker of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines.” When you picture those giant machines Peabody uses in strip mining coal, there’s a good chance you’re thinking of a “Cat.” Ditto for when you imagine the scenes you’ve seen of Suncor mining tar sands up in Canada. And that probably accounts in part for today’s stock price $33.18. At the moment CAT has a PE of 5.8 and an indicated yield of 5%. On the plus side, I feel very good about the long-term outlook for mining. Given our upcoming push (it is coming, right?) on the infrastructure front, I think the outlook for CAT overall is good. Like GE though, CAT has significant earnings from a finance products division. Can anyone help me out with the outlook for that? |
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