Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Caterpillar Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Current Valuation Ratios
Caterpillar Inc., current price multiples
| Caterpillar Inc. | Boeing Co. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||
| Current share price (P) | ||||||||||||
| No. shares of common stock outstanding | ||||||||||||
| Growth rate (g) | ||||||||||||
| Earnings per share (EPS) | ||||||||||||
| Next year expected EPS | ||||||||||||
| Operating profit per share | ||||||||||||
| Sales per share | ||||||||||||
| Book value per share (BVPS) | ||||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||||
| Price to earnings (P/E) | ||||||||||||
| Price to next year expected earnings | ||||||||||||
| Price-earnings-growth (PEG) | ||||||||||||
| Price to operating profit (P/OP) | ||||||||||||
| Price to sales (P/S) | ||||||||||||
| Price to book value (P/BV) | ||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Caterpillar Inc., historical price multiples
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
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).
The financial ratios over the five-year period reveal several notable trends in valuation metrics.
- Price to Earnings (P/E) Ratio
- The P/E ratio showed a marked decrease from 36.8 in 2020 to 16.82 in 2021, indicating a significant reduction in market valuation relative to earnings during that period. Subsequently, it increased slightly to 19.15 in 2022 before declining again to 15.55 in 2023. A minor increase to 15.65 was observed in 2024. Overall, the P/E ratio demonstrates increased market caution or lower growth expectations after 2020, stabilizing at a lower range in the latter years.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio declined steadily from 24.23 in 2020 to 15.87 in 2021, reflecting a lower valuation based on operating profit. It remained relatively stable with a slight increase to 16.25 in 2022, followed by a further decrease to 12.4 in 2023. A marginal recovery to 12.92 occurred in 2024. This trend suggests that the market is valuing the company's operating profit more conservatively post-2020, consistent with the P/E ratio trend.
- Price to Sales (P/S) Ratio
- The P/S ratio decreased from 2.83 in 2020 to 2.26 in 2021, showing a reduction in the price investors are willing to pay per unit of sales. The ratio stabilized around 2.27 in 2022, then rose to 2.52 in 2023 and further to 2.75 in 2024. This upward movement after 2021 indicates improving sales valuation or better market sentiment towards sales growth in recent years.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio decreased from 7.2 in 2020 to 6.62 in 2021, but then consistently increased to 8.09 in 2022, 8.25 in 2023, and 8.66 in 2024. This rising trend suggests growing market confidence in the company's net asset value or equity position over the last three years, reflecting strengthening balance sheet perceptions.
In summary, the data shows a general pattern where valuation based on earnings and operating profit significantly contracted after 2020 but then stabilized at lower levels. Meanwhile, valuation metrics related to sales and book value demonstrated a recovery and upward trend after initial declines, indicating a nuanced market view differentiating between profitability and asset-based assessments.
Price to Earnings (P/E)
Caterpillar Inc., historical P/E 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 | ||||||
| Selected Financial Data (US$) | ||||||
| Profit attributable to common stockholders (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/E Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/E Ratio, Industry | ||||||
| Industrials | ||||||
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 2024 Calculation
EPS = Profit attributable to common stockholders ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Caterpillar Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trajectory over the five-year period. Starting at $202.30 at the end of 2020, it showed a modest increase in 2021 to $203.64. From 2022 onwards, the growth rate accelerated significantly, reaching $248.70 in 2022, $321.91 in 2023, and further rising to $353.32 by the end of 2024. This upward trend indicates a positive market sentiment and increased investor confidence.
- Earnings Per Share (EPS)
- EPS experienced substantial growth throughout the timeframe. Beginning at $5.50 in 2020, it more than doubled to $12.11 in 2021. The upward momentum continued with steady increases, reaching $12.99 in 2022, then moving to $20.70 in 2023, and finally $22.58 in 2024. The notable rise in EPS, especially from 2022 forward, suggests improving profitability and operational efficiency.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio showed variability with an overall declining trend. Initially high at 36.8 in 2020, the ratio dropped sharply to 16.82 in 2021, indicating that the share price increase was more aligned with earning growth rather than overvaluation. In 2022, the ratio slightly increased to 19.15, then decreased again to 15.55 in 2023 and remained relatively stable at 15.65 in 2024. The downward trend in P/E ratio throughout the period, despite rising share prices, reflects accelerating earnings growth outpacing stock price gains, signifying enhanced valuation attractiveness.
- Summary Insights
- Overall, the data indicate strong financial performance characterized by robust EPS growth and significant appreciation in share price. The reduction in P/E ratio over time coupled with rising earnings suggests the company’s market valuation became more justified and supported by its earnings power. This pattern reflects an improving fundamental outlook and may imply greater investor confidence balanced by realistic valuation benchmarks.
Price to Operating Profit (P/OP)
Caterpillar Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating profit (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/OP Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/OP Ratio, Industry | ||||||
| Industrials | ||||||
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 2024 Calculation
Operating profit per share = Operating profit ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Caterpillar Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a consistent upward trajectory over the five-year period. Starting at $202.3 at the end of 2020, it exhibited moderate growth in 2021 to $203.64, followed by a more pronounced increase in 2022 to $248.7. The most significant rises occurred in 2023 and 2024, reaching $321.91 and $353.32 respectively, indicating strong market confidence and investor demand during the latest years.
- Operating Profit per Share
- Operating profit per share showed a steady and substantial increase throughout the period. It rose from $8.35 in 2020 to $12.83 in 2021, then continued advancing to $15.31 in 2022. The growth accelerated markedly in 2023, reaching $25.96, and further climbed to $27.35 in 2024, reflecting improved operational efficiency or profitability enhancements over time.
- Price-to-Operating Profit Ratio (P/OP)
- The P/OP ratio presented a declining trend overall, indicating that the share price was growing at a slower rate relative to operating profit per share. Beginning with a high ratio of 24.23 in 2020, it decreased to 15.87 by 2021 and remained relatively stable in 2022 at 16.25. The ratio then fell more sharply in 2023 to 12.4, before slightly increasing to 12.92 in 2024. This suggests improving valuation efficiency as earnings growth outpaced share price increases, signaling potentially better value for investors.
Price to Sales (P/S)
Caterpillar Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Sales of Machinery, Energy & Transportation (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/S Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/S Ratio, Industry | ||||||
| Industrials | ||||||
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 2024 Calculation
Sales per share = Sales of Machinery, Energy & Transportation ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Caterpillar Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibits a consistent upward trend over the analyzed five-year period, increasing from $202.30 at the end of 2020 to $353.32 by the end of 2024. Notably, the growth accelerates particularly from 2022 onwards, with a pronounced rise between 2022 and 2023 as well as continued appreciation into 2024.
- Sales per Share
- Sales per share show steady growth throughout the period, increasing from $71.56 in 2020 to $128.39 in 2024. The increase is relatively linear with a gradual rise each year, suggesting consistent improvement in revenue generated on a per-share basis.
- Price to Sales Ratio (P/S)
- The P/S ratio decreases from 2.83 in 2020 to a low of 2.26 in 2021, indicating that the share price growth did not fully keep pace with sales per share improvements during that year. From 2021 onwards, the P/S ratio trends upward again, reaching 2.75 by 2024. This reflects the share price increasing at a faster rate relative to sales per share in the latter years, particularly from 2022 onwards.
- Overall Insights
- The data suggests a positive performance trajectory with both share price and sales per share increasing over time. The initial drop in the P/S ratio in 2021 indicates a potential undervaluation returning to alignment in subsequent years. Subsequent increases in the P/S ratio highlight renewed market confidence or investor willingness to pay a premium relative to sales growth. The steadiness of sales per share growth, coupled with accelerating share price appreciation, may reflect expectations of future earnings growth or other qualitative factors driving investor demand.
Price to Book Value (P/BV)
Caterpillar Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Equity attributable to common shareholders (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/BV Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/BV Ratio, Industry | ||||||
| Industrials | ||||||
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 2024 Calculation
BVPS = Equity attributable to common shareholders ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Caterpillar Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrates a consistent upward trend over the five-year period. Starting at $202.30 as of December 31, 2020, the value increased marginally to $203.64 in 2021, followed by a more substantial rise reaching $248.70 in 2022. This positive momentum strengthened further in 2023, with the share price climbing significantly to $321.91, and continued to grow to $353.32 by the end of 2024. This progression suggests increased market confidence or improved performance expectations over time.
- Book Value Per Share (BVPS)
- The book value per share exhibited steady growth, albeit at a more moderate pace than the share price. Beginning at $28.11 in 2020, it rose to $30.76 in 2021 and remained relatively flat at $30.73 in 2022. However, the book value per share experienced a notable increase in 2023, reaching $39.04, and further advancing to $40.78 by the end of 2024. This pattern indicates an improvement in the company's net asset value on a per share basis, particularly in the latter years of the period reviewed.
- Price-to-Book Value Ratio (P/BV)
- The price-to-book value ratio fluctuated and overall displayed an increasing trend. Starting at 7.2 in 2020, it declined slightly to 6.62 in 2021, which may reflect a temporary correction or changes in market valuation dynamics relative to the book value. Thereafter, the ratio rose substantially to 8.09 in 2022 and continued increasing steadily to 8.25 in 2023 and 8.66 in 2024. The rising P/BV ratios suggest that the market valuation increased at a faster rate than the underlying book value, indicating enhanced investor optimism or expectations regarding future growth or profitability.