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Caterpillar ROE %

: 30.35% (As of Mar. 2020)
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ROE % is calculated as Net Income attributable to Common Stockholders (Net Income minus the preferred dividends paid) divided by its average Total Stockholders Equity over a certain period of time. Caterpillar's annualized net income attributable to common stockholders for the quarter that ended in Mar. 2020 was $4,368 Mil. Caterpillar's average Total Stockholders Equity over the quarter that ended in Mar. 2020 was $14,393 Mil. Therefore, Caterpillar's annualized ROE % for the quarter that ended in Mar. 2020 was 30.35%.

NYSE:CAT' s ROE % Range Over the Past 10 Years
Min: -0.48   Med: 23.68   Max: 44.33
Current: 35.83
-0.48
44.33

During the past 13 years, Caterpillar's highest ROE % was 44.33%. The lowest was -0.48%. And the median was 23.68%.

NYSE:CAT's ROE % is ranked higher than
98% of the 171 Companies
in the Farm & Heavy Construction Machinery industry.

( Industry Median: 6.00 vs. NYSE:CAT: 35.83 )

Caterpillar ROE % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Caterpillar Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 15.92 -0.48 5.62 44.33 42.57

Caterpillar Quarterly Data
Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 51.05 42.81 40.12 29.74 30.35
Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

Caterpillar ROE % Distribution

* The bar in red indicates where Caterpillar's ROE % falls into.


Caterpillar ROE % Calculation

Caterpillar's annualized ROE % for the fiscal year that ended in Dec. 2019 is calculated as

ROE %=Net Income attributable to Common Stockholders (A: Dec. 2019 )/( (Total Stockholders Equity (A: Dec. 2018 )+Total Stockholders Equity (A: Dec. 2019 ))/ count )
=6093/( (14039+14588)/ 2 )
=6093/14313.5
=42.57 %

Caterpillar's annualized ROE % for the quarter that ended in Mar. 2020 is calculated as

ROE %=Net Income attributable to Common Stockholders (Q: Mar. 2020 )/( (Total Stockholders Equity (Q: Dec. 2019 )+Total Stockholders Equity (Q: Mar. 2020 ))/ count )
=4368/( (14588+14197)/ 2 )
=4368/14392.5
=30.35 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

In the calculation of annual ROE %, the net income attributable to common stockholders of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income attributable to common stockholders data used here is four times the quarterly (Mar. 2020) net income attributable to common stockholders data. ROE % is displayed in the 30-year financial page.

Caterpillar  (NYSE:CAT) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %(Q: Mar. 2020 )
=Net Income attributable to Common Stockholders/Total Stockholders Equity
=4368/14392.5
=(Net Income attributable to Common Stockholders / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(4368 / 42540)*(42540 / 77173.5)*(77173.5 / 14392.5)
=Net Margin %*Asset Turnover*Equity Multiplier
=10.27 %*0.5512*5.3621
=ROA %*Equity Multiplier
=5.66 %*5.3621
=30.35 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %(Q: Mar. 2020 )
=Net Income to Common Stockholder/Total Stockholders Equity
=4368/14392.5
=(NI to Com. Stockholder/Pre-Tax Income) * (Pre-Tax Income/Operating Income) * (Operating Income/Revenue) * (Revenue/Total Assets) * (Total Assets/Total Stockholders Equity)
= (4368 / 6052) * (6052 / 5616) * (5616 / 42540) * (42540 / 77173.5) * (77173.5 / 14392.5)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.7217 * 1.0776 * 13.2 % * 0.5512 * 5.3621
=30.35 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Mar. 2020) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Mar. 2020) revenue data. The same rule applies to Pre-Tax Income and Operating Income.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Be Aware

Net income attributable to common stockholders is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.

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