Buy Caterpillar Shares: Dividends, Forecasts, Target Price
Published: 27 August 2020 by Valentina
The CAT asset has many characteristics similar to the bulldozers that have made this brand so recognizable around the world. In other words, these shares behaved just like a bulldozer from 2016 to 2018 and then stopped for a couple of years. Now the asset is increasing again, so is it a good time to buy Caterpillar shares or is it too late?
To answer this question impartially and thoughtfully, we need to conduct an analysis of the company and evaluate the prospects in the stock exchange market by relying on the assessments of the most important market analysts.
But before going into these details, we recommend choosing the broker to use for investing (or at least to use in order to analyze the asset). The safest and most convenient intermediaries are commission-free online brokers.
Below, you can find a list of the best online brokers, where you can buy Caterpillar shares without paying commissions. With eToro, you can also make automatic investments.
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 250€
Min. Deposit: 100€
72.30% of retail CFD accounts lose money
Min. Deposit: 250€
Caterpillar: The origins
While the Caterpillar Tractor Company was originally founded in 1925 following a merger between the Holt Manufacturing Company and the CL Best Tractor Company, the Caterpillar name was founded years earlier.
In the early 1900s, while looking for a way to improve the mobility and traction of his company’s steam tractors, Benjamin Holt replaced wheels with wooden tracks bolted to chains.
The innovation worked so well that one viewer commented that the car crawled like a caterpillar. Holt liked the comment and nicknamed his new machine “Caterpillar,” a name that eventually became a brand in 1910.
In 1986, Caterpillar officially changed its name from Caterpillar Tractor Company to Caterpillar, Inc. based in Peoria, Illinois,
How to buy Caterpillar shares
We have already mentioned the commission-free online brokers: They are simple to use and very cheap, ideal for making small financial investments.
Compared to traditional banks, you will save on stamps and commissions, but above all, you will be able to access equity investments even with limited capital.
Online brokers are not all the same: To avoid scams, you must only choose intermediaries authorized by a control body on stock market operators, such as the FCA.
These brokers offer contracts called CFDs (Contracts for Difference) that allow you to invest up or down on many stocks and assets and earn (if the prediction is correct) in each market scenario.
Buy Caterpillar shares with the best brokers
The best brokers to buy Caterpillar shares must have these characteristics:
- Have a FCA, CySEC or equivalent license
- Offer the opportunity to invest both upwards and downwards
- Don’t charge commissions
- Request a minimum deposit of no more than 250 euros.
The most suitable intermediaries for trading and buy Caterpillar shares are: eToro, ForexTB and Trade.com.
eToro: Semplicity and automatic trading
eToro is the online broker with the largest number of active users: over 7 million. This number is a clear sign of the reliability of this broker.
The eToro trading platform, visible in the screenshot below, is very clear and intuitive:
To buy Caterpillar shares, just click on the “Invest” button, decide how much to invest in the operation and whether to buy or sell the shares.
Despite the apparent simplicity of the platform, this software offers all the tools and indicators necessary for a complete analysis of the asset.
Regarding the security of the platform, it is guaranteed by the FCA license and other international authorizations.
The growth of eToro is also due to its truly innovative automatic investment system: Copy Trading.
This feature allows you to copy the market operations of the best traders in the world (in eToro) in a totally automatic and free way.
To access Copy Trading just follow these simple steps:
- Register on eToro
- In the section “people”, you can choose the traders to copy based on the performance.
- With a click, Copy Trading will copy exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in proportion to your investment), without doing anything else.
Here are some of the best eToro Traders (that can be copied):
Both Copy Trading as well as traditional trading can also be tested on a free Demo account, without taking real risks.
For more details you can read our full eToro review.
ForexTB: Trading Course and Free Trading Signals
ForexTB is a “young” broker, which is quickly making its way to the top platforms thank to its very useful services for free.
Unlike many other competitors, ForexTB offers two trading platforms – both free -, which are very different from each other:
- The web platform is easy to use and can be entered from any browser without downloading any software.
- Metatrader 4 is more technical and full of professional indicators and meets the needs of the more experienced traders.
The CySEC license guarantees the safety and reliability of this international broker.
Useful services start with a comprehensive trading course. This is an ebook that explains the technical analysis very clearly and can be downloaded for free from the official link below:
Traders also need operational support and for this reason ForexTB offers to all investors its Trading Signals, processed by Trading Central. These are precise indications that have a success rate of 70% and are offered for free by clicking the link below:
Trade.com: Free training and minimum deposit
Trade.com is emerging as a broker whose missions are training and investor support.
The trading platform of Trade.com is really practical, with a functional interface, and with a simple filter with which you can easily find the assets you want.
Its safety is confirmed by the FCA license, which certifies compliance with the rules and laws in force.
Trade.com’s training support begins with the basics of trading, which have been collected and organized into a trading course (in ebook format) which can be downloaded for free from the link below:
For more experienced traders, in addition to the course, there is an entire didactic area divided into three levels based on the trader’s preparation: basic, intermediate, advanced. Every investor can therefore find information and courses.
The minimum deposit is often an obstacle for less capitalized investors and Trade.com has decided to allow the opening of an account with only 100 Euros, so as to facilitate access to the markets with a small investment.
However, if you want to practice, you can use the free and unlimited Demo account available, which offers all the features of the real account but without the risk of losing money.
Caterpillar Shares: Real-time listing
Caterpillar: The story and the results
While Benjamin Holt had a key role in the development of the industrial tractor well before Caterpillar’s official launch, a number of notable achievements continued to occur after the new company was formed in 1925.
Caterpillar heavy equipment supported US military efforts during World War II, and the company was able to scale up its US production to produce over 51,000 military caterpillar tractors.
Caterpillar’s history includes expansion into a variety of overseas markets after the war.
CAT machines have contributed to the construction of a huge number of roads, bridges, and buildings around the world, becoming a symbol of strength and reliability.
Over the years, Carterpillar has also grown thanks to a series of acquisitions that have made it the largest construction machinery manufacturing company in the world.
Caterpillar is listed on the NYSE and is part of the Dow Jones Index, one of the most important stock market indices in the world.
Is buying Caterpillar shares worth it?
Let’s try to answer this question: In order to do so, we will start with the evaluations of what the main analysts in the world say:
- Citigroup, for example, has increased its target from $ 125.00 to $ 150.00 for the Caterpillar stock. The company currently has a “buy” rating for the shares of this US company.
- BMO Capital Markets instead downgraded Caterpillar from an “outperforming” rating to a “performing” rating and set a target price of $ 130.00 for the company shares.
- UBS Group raised the target price on Caterpillar from $ 112.00 to $ 130.00 and gave the company a “neutral” rating.
- Bank of America reduced the target price on Caterpillar from $ 115.00 to $ 100.00 and set an “underperforming” rating for the company.
- Sanford C. Bernstein reduced Caterpillar from an “outperforming” rating to a “performing” rating.
- Finally, Credit Suisse Group reduced its target price on Caterpillar from $ 162.00 to $148.00 and set an “outperforming” rating
The company currently has an average “Buy” rating and an average target price of $ 130.68 according to the major investment banks.
These analysis and the chart above make it clear that buying Caterpillar shares is a good investment and there is still room for Caterpillar’s increasing trend. However, you have to be careful with the “timing”.
Caterpillar’s competitors certainly don’t stand by and are trying everything not to lose part of the market. Among these the most important are:
- John Deere
Caterpillar shares dividends
Caterpillar pays an annual dividend of $ 4.12 per share, with a dividend yield of 3.26%.
The company has increased its dividend for the past 10 consecutive years. Caterpillar pays 37.25% of its earnings as a dividend.
Caterpillar stocks forecasts
The company has a market capitalization of $ 70.42 billion; the share price has a 52-week low at $ 87.50 and a 52-week high at $ 150.55.
Revenues for the quarter fell 21.0% year-on-year due to the coronavirus, but the company is recovering quickly.
In the same period of the previous year, the company reported earnings per share of $ 2.94. On average, equity analysts expect Caterpillar to obtain $ 4.94 earnings per share for the current year.
Large investors have recently bought and sold shares of this company, but are mainly positive and are following the strong positive trend that is driving the stock.
- The forecasts for Caterpillar are positive in every situation, but in the short term some losses, even violent, of the share price could happen. Therefore, you have to opt for a long-term trading strategy following the indicators to obtain a profitable investment.
- If you want to make small short-term investments instead, we recommend following the market fluctuations with a swing trading strategy.
Caterpillar Shares: Target price
Analysts at the eToro Trading Desk have issued purchase ratings for Caterpillar.
Their twelve-month average target price is $ 142.75 for a long-term strategy.
What we have reported in this guide represent a very changing situation for the Caterpillar stock, despite the strong positive trend that has characterized it for a few weeks.
Analysts’ forecasts agree over the long term: Caterpillar is a good investment, but in the short term, the stock could experience quite important losses, before continuing its growth.
If you have little trading experience, you can test your trading strategy on Caterpillar shares on a Demo account. It is identical to the real one, but you will not risk anything because the money is virtual.
Here are the official links to access the Demo accounts of the best online brokers:
- Practice the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
- Access the Trade.com Demo account for free from this link
Yes, buying caterpillar shares is worthwhile but only by following a precise strategy analyzed in our guide.
The forecasts are positive, but the timing is fundamental and must be respected.
eToro is the most suitable broker to buy Caterpillar shares without paying commissions.
The 12-month target price of the Caterpillar stock is $ 142.75 per share.