Gurus Ken Fisher and Jim Kramer have recently touted this cyclical stock, based on its global prospects. The shares have a current annual dividend yield of 2.94%, paid quarterly.
Caterpillar Inc. (CAT)
From The Prudent Speculator
Caterpillar Inc. (CAT) is a leading global manufacturer of construction and mining equipment. CAT continues to have a dominant share in the U.S. market and is making headway in emerging economies such as China, India, Africa and the Middle East. Shares have struggled in 2019, given investor concerns over slowing global economic growth, volatile input costs and the U.S.-China trade spat.
While these operational hurdles aren’t likely to disappear tomorrow, we like that management is focused on doubling its aftermarket part and service business by 2025. We also think there is potential for increased global infrastructure spending and that it could be an election year topic.
With leaner operations, almost $7.4 billion in cash and billions more in free cash flow expected over the next few years, we see CAT being able to withstand changing business environments, becoming more aggressive in buying back shares and boosting the dividend. CAT trades below 11 times the NTM adjusted EPS estimate.
John Buckingham, The Prudent Speculator, www.theprudentspeculator.com, 877-817-4394, October 2019