Money and Finance
As mentioned in my previous post, I'm going to try and have 1 stock analysis report for some popular dividend growth stocks come out prior to their latest earnings release this week. Today we'll look at Caterpillar Inc. (CAT). Caterpillar was trading on Monday 7/23/12 at $81.84.
Company Background:
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It offers backhoe, skid steer, multi-terrain, track-type, and wheel loaders; track, wheel, and mini excavators; select work tools; track-type tractors; motor graders; pipelayers; and related parts for the heavy construction, general construction, mining and quarry, and aggregates markets. The company also provides electric rope and hydraulic shovels, mining trucks, wheel dozers, draglines, electric drive mining trucks, compactors, tunnel boring and underground mining equipment, drills, forestry products, highwall miners, off-highway and articulated trucks, paving products, wheel tractor scrapers, electronics and control systems, and machinery components for mine, quarry, forestry, paving, and tunneling applications. In addition, it offers reciprocating engine powered generator sets; integrated systems for the electric power generation industry; reciprocating engines and integrated systems and solutions for the marine and petroleum industries, and industrial applications; turbines and turbine-related services; and diesel-electric locomotives and components, and other rail-related products and services. Further, the company provides retail financing for its equipment, machinery, and engines, as well as for vehicles, power generation facilities, and marine vessels that incorporate its products; wholesale financing to its dealers and customers; and insurance services. Additionally, it offers component manufacturing, remanufacturing, and logistics services, as well as distributes other companies products. Caterpillar Inc. markets its products through its sales force, distribution centers, dealers, and distributors.
DCF Valuation:
Analysts expect Caterpillar to grow earnings 17.50% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter. Running these numbers through a DCF analysis with a 10% discount rate yields a fair value price of $249.63. This means that at $81.84 the shares are undervalued by 67.2%.
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Money and Finance
Caterpillar Stock Analysis
As mentioned in my previous post, I'm going to try and have 1 stock analysis report for some popular dividend growth stocks come out prior to their latest earnings release this week. Today we'll look at Caterpillar Inc. (CAT). Caterpillar was trading on Monday 7/23/12 at $81.84.
Company Background:
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It offers backhoe, skid steer, multi-terrain, track-type, and wheel loaders; track, wheel, and mini excavators; select work tools; track-type tractors; motor graders; pipelayers; and related parts for the heavy construction, general construction, mining and quarry, and aggregates markets. The company also provides electric rope and hydraulic shovels, mining trucks, wheel dozers, draglines, electric drive mining trucks, compactors, tunnel boring and underground mining equipment, drills, forestry products, highwall miners, off-highway and articulated trucks, paving products, wheel tractor scrapers, electronics and control systems, and machinery components for mine, quarry, forestry, paving, and tunneling applications. In addition, it offers reciprocating engine powered generator sets; integrated systems for the electric power generation industry; reciprocating engines and integrated systems and solutions for the marine and petroleum industries, and industrial applications; turbines and turbine-related services; and diesel-electric locomotives and components, and other rail-related products and services. Further, the company provides retail financing for its equipment, machinery, and engines, as well as for vehicles, power generation facilities, and marine vessels that incorporate its products; wholesale financing to its dealers and customers; and insurance services. Additionally, it offers component manufacturing, remanufacturing, and logistics services, as well as distributes other companies products. Caterpillar Inc. markets its products through its sales force, distribution centers, dealers, and distributors.
DCF Valuation:
Analysts expect Caterpillar to grow earnings 17.50% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter. Running these numbers through a DCF analysis with a 10% discount rate yields a fair value price of $249.63. This means that at $81.84 the shares are undervalued by 67.2%.
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- Rpm International Stock Analysis
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- Emerson Stock Analysis
Last week was a slow week for the blog because work was really busy, so I figured I'd give y'all another stock analysis. This time I decided to take a look at Emerson Electric Company (EMR). Emerson closed on Friday 5/25/12 at $47.28. Company...