Caterpillar Inc., FCFE calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Profit attributable to common stockholders	10,792)	10,335)	6,705)	6,489)	2,998)
(Profit) loss attributable to noncontrolling interests	(4)	(3)	(1)	4)	5)
Net noncash charges	2,106)	2,402)	2,862)	1,352)	3,741)
Changes in assets and liabilities, net of acquisitions and divestitures	(859)	151)	(1,800)	(647)	(417)
Net cash provided by operating activities	12,035)	12,885)	7,766)	7,198)	6,327)
Capital expenditures, excluding equipment leased to others	(1,988)	(1,597)	(1,296)	(1,093)	(978)
Expenditures for equipment leased to others	(1,227)	(1,495)	(1,303)	(1,379)	(1,137)
Proceeds from disposals of leased assets and property, plant and equipment	722)	781)	830)	1,265)	772)
Proceeds from debt issued, original maturities greater than three months	10,283)	8,257)	6,674)	6,989)	10,431)
Payments on debt, original maturities greater than three months	(9,316)	(6,318)	(7,728)	(9,796)	(8,237)
Short-term borrowings, net, original maturities three months or less	(168)	(1,345)	402)	3,488)	(2,804)
Free cash flow to equity (FCFE)	10,341)	11,168)	5,345)	6,672)	4,374)

Based on: 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), 10-K (reporting date: 2020-12-31).

Net Cash Provided by Operating Activities: The net cash provided by operating activities demonstrates a consistent upward trajectory from 2020 through 2023, starting at $6,327 million in 2020 and reaching a peak of $12,885 million in 2023. However, in 2024, there is a slight decline to $12,035 million. This pattern indicates strong operating cash generation capabilities with an exceptional increase between 2022 and 2023, nearly doubling in that period, followed by a modest contraction in the most recent year.
Free Cash Flow to Equity (FCFE): Free cash flow to equity follows a somewhat similar pattern but with more pronounced fluctuations. It increased significantly from $4,374 million in 2020 to $6,672 million in 2021, then declined to $5,345 million in 2022. In 2023, there was a substantial recovery to $11,168 million, reaching its highest point, and this was followed by a slight decrease to $10,341 million in 2024. The FCFE trend highlights variability in free cash available to equity holders but demonstrates overall growth and strong recovery after a dip in 2022.
General Observations: Both metrics showcase strong cash flow performance over the five-year span, with peak values occurring in 2023. The dip in 2024 suggests potential challenges or changes in cash flow dynamics. The robust growth in operating activities and FCFE from 2022 to 2023 indicates possible operational improvements or favorable market conditions during that period. The relative decline in 2024 calls for investigation into operational factors or capital expenditure shifts influencing cash flow availability.

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

No. shares of common stock outstanding	471,041,788
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	10,341)
FCFE per share	21.95
Current share price (P)	388.21
Valuation Ratio
P/FCFE	17.68
Benchmarks
P/FCFE, Competitors¹
Boeing Co.	—
Eaton Corp. plc	38.11
GE Aerospace	66.73
Honeywell International Inc.	9.48
Lockheed Martin Corp.	13.41
RTX Corp.	96.10
P/FCFE, Sector
Capital Goods	38.77
P/FCFE, Industry
Industrials	33.79

Based on: 10-K (reporting date: 2024-12-31).

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, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
No. shares of common stock outstanding¹	477,932,024	499,377,269	516,345,490	535,888,051	545,303,847
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	10,341)	11,168)	5,345)	6,672)	4,374)
FCFE per share³	21.64	22.36	10.35	12.45	8.02
Share price^1, 4	353.32	321.91	248.70	203.64	202.30
Valuation Ratio
P/FCFE⁵	16.33	14.39	24.03	16.36	25.22
Benchmarks
P/FCFE, Competitors⁶
Boeing Co.	—	—	120.43	—	6.78
Eaton Corp. plc	31.06	33.65	28.68	24.43	25.59
GE Aerospace	53.26	225.15	44.45	—	—
Honeywell International Inc.	8.35	26.10	27.59	46.23	12.59
Lockheed Martin Corp.	13.31	13.13	11.63	14.65	15.57
RTX Corp.	85.26	7.05	26.71	35.07	—
P/FCFE, Sector
Capital Goods	33.57	20.26	25.94	—	74.91
P/FCFE, Industry
Industrials	30.92	23.85	25.07	—	40.69

Based on: 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), 10-K (reporting date: 2020-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 10,341,000,000 ÷ 477,932,024 = 21.64

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

⁵ 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= 353.32 ÷ 21.64 = 16.33

⁶ Click competitor name to see calculations.

Share Price Trend: The share price exhibited a consistent upward trajectory over the five-year period. Starting at $202.30 at the end of 2020, it increased slightly to $203.64 in 2021, followed by a more pronounced rise to $248.70 in 2022. The growth accelerated in 2023, reaching $321.91, and continued to climb to $353.32 by the end of 2024. This indicates strong market confidence and potentially positive investor sentiment toward the company.
Free Cash Flow to Equity (FCFE) Per Share: The FCFE per share experienced fluctuations during the period. It began at $8.02 in 2020, increased significantly to $12.45 in 2021, then declined to $10.35 in 2022. A substantial surge occurred in 2023 with FCFE per share reaching $22.36, followed by a slight decrease to $21.64 in 2024. The pronounced increase in 2023 highlights improved cash generation available to shareholders, although the slight drop in 2024 may suggest emerging operational or capital expenditure considerations.
Price to FCFE Ratio (P/FCFE): The P/FCFE ratio showed volatility and an overall downward trend, reflecting changes in both market valuation and cash flow generation. It started relatively high at 25.22 in 2020, decreased markedly to 16.36 in 2021, then rebounded to 24.03 in 2022. Subsequently, it declined to its lowest point of 14.39 in 2023 before rising modestly to 16.33 in 2024. The dips in the ratio correspond to periods of elevated FCFE per share, suggesting that increases in free cash flow were not fully matched by share price increases in those years, potentially signaling undervaluation or cautious investor outlook. Conversely, the ratio's rise in some years may indicate premium valuation or market optimism.

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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