Caterpillar Inc., FCFE calculation

US$ in millions

12 months ended:	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Profit attributable to common stockholders	8,884)	10,792)	10,335)	6,705)	6,489)
(Profit) loss attributable to noncontrolling interests	(2)	(4)	(3)	(1)	4)
Net noncash charges	3,205)	2,106)	2,402)	2,862)	1,352)
Changes in assets and liabilities, net of acquisitions and divestitures	(348)	(859)	151)	(1,800)	(647)
Net cash provided by operating activities	11,739)	12,035)	12,885)	7,766)	7,198)
Capital expenditures, excluding equipment leased to others	(2,821)	(1,988)	(1,597)	(1,296)	(1,093)
Expenditures for equipment leased to others	(1,465)	(1,227)	(1,495)	(1,303)	(1,379)
Proceeds from disposals of leased assets and property, plant and equipment	708)	722)	781)	830)	1,265)
Proceeds from debt issued, original maturities greater than three months	11,105)	10,283)	8,257)	6,674)	6,989)
Payments on debt, original maturities greater than three months	(8,081)	(9,316)	(6,318)	(7,728)	(9,796)
Short-term borrowings, net, original maturities three months or less	1,106)	(168)	(1,345)	402)	3,488)
Free cash flow to equity (FCFE)	12,291)	10,341)	11,168)	5,345)	6,672)

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The financial information reveals fluctuating trends in both net cash provided by operating activities and free cash flow to equity (FCFE) over the five-year period. Operating cash flow demonstrates an overall positive trajectory, while FCFE exhibits more pronounced variability.

Net Cash from Operations: Net cash provided by operating activities increased from US$7,198 million in 2021 to US$7,766 million in 2022, representing a modest growth rate. A substantial increase is then observed in 2023, reaching US$12,885 million. This is followed by a decrease to US$12,035 million in 2024 and a further decline to US$11,739 million in 2025. Despite the recent declines, the level remains significantly above the 2021 and 2022 figures.
Free Cash Flow to Equity (FCFE): FCFE experienced a notable decrease from US$6,672 million in 2021 to US$5,345 million in 2022. A significant recovery occurred in 2023, with FCFE rising to US$11,168 million. This upward trend continued into 2024, reaching US$10,341 million, before increasing again to US$12,291 million in 2025. The 2025 value represents the highest FCFE observed during the analyzed period.

A correlation exists between net cash from operations and FCFE, as increases in operating cash flow generally correspond with increases in FCFE. However, the magnitude of change differs between the two metrics. The substantial increase in both metrics in 2023 and 2025 suggests periods of strong financial performance and efficient cash management. The decline in operating cash flow in 2024 and 2025, while not fully mirrored in FCFE, warrants further investigation to understand the underlying drivers.

FCFE Volatility: FCFE demonstrates greater volatility than net cash from operating activities. The fluctuations suggest that factors beyond core operating performance, such as financing activities or changes in equity structure, may be influencing FCFE. The increasing trend in FCFE from 2023 to 2025 indicates a strengthening of cash flow available to equity holders.

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Caterpillar Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	465,287,332
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	12,291)
FCFE per share	26.42
Current share price (P)	830.79
Valuation Ratio
P/FCFE	31.45
Benchmarks
P/FCFE, Competitors¹
Boeing Co.	—
Eaton Corp. plc	41.37
GE Aerospace	39.11
Honeywell International Inc.	17.48
Lockheed Martin Corp.	14.35
RTX Corp.	52.02
P/FCFE, Sector
Capital Goods	38.87
P/FCFE, Industry
Industrials	32.02

Based on: 10-K (reporting date: 2025-12-31).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Caterpillar Inc., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
No. shares of common stock outstanding¹	465,287,332	477,932,024	499,377,269	516,345,490	535,888,051
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	12,291)	10,341)	11,168)	5,345)	6,672)
FCFE per share³	26.42	21.64	22.36	10.35	12.45
Share price^1, 4	774.20	353.32	321.91	248.70	203.64
Valuation Ratio
P/FCFE⁵	29.31	16.33	14.39	24.03	16.36
Benchmarks
P/FCFE, Competitors⁶
Boeing Co.	—	—	—	120.43	—
Eaton Corp. plc	36.55	31.06	33.65	28.68	24.43
GE Aerospace	41.29	53.26	225.15	44.45	—
Honeywell International Inc.	19.96	8.35	26.10	27.59	46.23
Lockheed Martin Corp.	17.36	13.31	13.13	11.63	14.65
RTX Corp.	59.11	85.26	7.05	26.71	35.07
P/FCFE, Sector
Capital Goods	40.08	33.57	20.26	25.94	—
P/FCFE, Industry
Industrials	32.04	30.92	23.85	25.07	—

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 12,291,000,000 ÷ 465,287,332 = 26.42

⁴ Closing price as at the filing date of Caterpillar Inc. Annual Report.

⁵ 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= 774.20 ÷ 26.42 = 29.31

⁶ Click competitor name to see calculations.

The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibited fluctuating behavior over the five-year period. Initial observations reveal an increase followed by a decrease, and then a substantial rise towards the end of the period. A closer examination of the underlying components – share price and FCFE per share – provides further insight into these movements.

Share Price: The share price demonstrated a consistent upward trend from 2021 to 2024, increasing from US$203.64 to US$353.32. A significant jump occurred between 2024 and 2025, with the share price reaching US$774.20. This represents a substantial acceleration in price appreciation.
FCFE per Share: FCFE per share initially decreased from US$12.45 in 2021 to US$10.35 in 2022. However, it experienced a considerable increase in 2023, reaching US$22.36. This upward momentum continued, albeit at a slower pace, with values of US$21.64 and US$26.42 reported for 2024 and 2025, respectively. The growth in FCFE per share appears to have stabilized in the later years.
P/FCFE Ratio: The P/FCFE ratio increased from 16.36 in 2021 to 24.03 in 2022, reflecting the greater increase in share price relative to FCFE per share. A subsequent decrease to 14.39 in 2023 was observed, driven by the significant rise in FCFE per share. The ratio remained relatively stable between 2023 and 2024, at 14.39 and 16.33 respectively. Finally, the ratio increased substantially to 29.31 in 2025, primarily due to the dramatic increase in share price outpacing the growth in FCFE per share. This suggests that the market valuation became considerably higher relative to the free cash flow available to equity holders at the end of the period.

In summary, the P/FCFE ratio’s trajectory was influenced by the interplay between share price and FCFE per share. While FCFE per share showed positive growth overall, the more pronounced increase in share price, particularly in 2025, led to a higher P/FCFE ratio, indicating a potentially elevated valuation based on this metric.

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Caterpillar Inc. (NYSE:CAT)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical