Caterpillar (NYSE:CAT) is an Illinois-based company that manufactures and sells construction and mining
equipment, diesel and natural gas engines, and industrial gas turbines around the world. Shares of this
industrial stock have climbed 5.9% in 2022 as of close on October 28. The stock has shot up 33% over
the past month.
The company unveiled its third quarter fiscal 2022 earnings before markets opened on October 27.
Caterpillar soundly beat expectations and posted sales and revenue growth of 21% to $15 billion. Sales
and revenues were powered by favourable price realization and higher sales volumes. That was offset
somewhat by currency fluctuations related to the euro.
Adjusted profit per share rose to $3.95 compared to $2.66 per share in the third quarter of fiscal 2021.
Meanwhile, operating profit margin rose to 16.2% compared to 13.4% in the prior year. Operating profit
reached $2.42 billion – up 46% from Q3 2021. This was bolstered by the same conditions that led to
higher sales and revenues.
Investors should feel confident in the future of this industry. Fortune Business Insights estimated that
the global construction equipment market was worth US$133 billion in 2020. This market researcher
projects that the market will grow from US$141 billion in 2021 to US$222 billion in 2028. That would
represent a CAGR of 6.6% over the forecast period.
Shares of Caterpillar still possess a favourable price-to-earnings ratio of 15. Caterpillar offers a quarterly
dividend of US$1.20 per share. That represents a 2.1% yield.
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