Caterpillar (NYSE:CAT) is the world’s largest construction equipment manufacturer. Shares have dropped 1% in 2019 as of mid-afternoon trading on September 6. This is largely due to headwinds generated by the ongoing United States-China trade war.
Still, the company reported a 3% increase in sales and revenue for the second quarter of 2019. However, it did project that its profit per share would come in at the lower end of its full-year outlook. It is still expected to post yet another record for the full year.
Sales in Asia/Pacific took a hit due to lower demand, which has been exacerbated by the trade war. Trade talks between the U.S. and China are set to recommence in October. There is still hope for a breakthrough especially with political pressure building on the Trump administration ahead of an election season.
The company has remained optimistic on the global economic outlook with underlying demand and sales to end-users staying strong.
Caterpillar stock currently possesses a price-to-earnings ratio of 10.9 but a high price-to-book of 4.6. Shares dipped into technically oversold territory in mid-August but have since bounced back.
The stock still offers a quarterly cash dividend of $0.86 per share, which represents a 3.3% yield. Caterpillar has increased its dividend for at least 25 years in a row, making it a dividend aristocrat.
There are some good signs on the macro side for Caterpillar in early September, and its stock is still trading for solid value. It is worth targeting right now.
