Industrials
The world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines.
View forensic reportDeere, Caterpillar and Honeywell all sit at the centre of the capex recovery story. Each offers a different exposure. Here is how to rank them.
Across mining recoveries, infrastructure booms, and the data centre build-out, Caterpillar's management has shown a capital allocation discipline that most industrial peers lack. The stock is pricing that in.
Caterpillar's $65.7 billion revenue base, elite free cash flow conversion, and hidden data centre construction exposure make the 42x multiple more justified than it appears.
Caterpillar has compounded revenue at 10% annually while returning $25 billion to shareholders over five years. The capital allocation discipline is the best in industrials — and the cycle isn't over.
With $10.3 billion in free cash flow and a 16% operating margin on $67.6 billion in revenue, Caterpillar is executing a capital allocation playbook that the market has not fully valued.