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The 3-Year Sortino Ratio measures the additional return that an investor receives per unit of the downside risk over the past three years. As of today (2026-08-08), Caterpillar's 3-Year Sortino Ratio is 2.97.
Caterpillar (XSWX:CAT) 3-Year Sortino Ratio Explanation
The 3-Year Sortino Ratio inidicates the risk-adjusted return of an investment over the past three year. It is calculated as the annualized result of the average three-year monthly excess returns divided by the standard deviation of negative returns in the three-year period. The monthly excess return is the monthly investment return minus the monthly risk-free rate (typically the 10-year Treasury Constant Maturity Rate). If the risk-free rate for a specific region is not available, U.S. data is used by default.
Differnt from the Sharpe Ratio that penalizes both upside and downside volatility equally, the Sortino Ratio penalizes only those returns falling below a user-specified target or required rate of return. The expected returns here is set to the risk-free rate as well.
Caterpillar 3-Year Sortino Ratio Related Terms
XSWX:CAT vs DE, PCAR, CNH: 3-Year Sortino Ratio Comparison
For the Farm & Heavy Construction Machinery subindustry, Caterpillar's 3-Year Sortino Ratio, along with its competitors' market caps and 3-Year Sortino Ratio data, can be viewed below:
* 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. Note that "N/A" values will not show up in the chart.
Caterpillar 3-Year Sortino Ratio vs Farm & Heavy Construction Machinery Industry
For the Farm & Heavy Construction Machinery industry and Industrials sector, Caterpillar's 3-Year Sortino Ratio distribution charts can be found below:
* The bar in red indicates where Caterpillar's 3-Year Sortino Ratio falls into.
The 3-Year Sortino Ratio measures the risk-adjusted return of an investment asset or portfolio in the last three year, focusing specifically on downside risk rather than total risk. A stock / portfolio's 3-Year Sortino Ratio can be calculated by dividing the difference between the three-year average monthly returns of the investment and the risk-free rate, by the standard deviation of the downside risks over the past three year.
A downside risk is a potential loss from the asset or investment. The Downside risk here is measured by the downside deviation, which is the standard deviation of negative returns.
Caterpillar (XSWX:CAT) has a 3-Year Sortino Ratio of 2.97 as of Aug. 08, 2026. 3-Year Sortino Ratio measures the additional return that an investor receives per unit of the downside risk over the past three years. View historical data for Caterpillar and its competitors.
Is Caterpillar's 3-Year Sortino Ratio too high?
Caterpillar's current 3-Year Sortino Ratio is 2.97. Overall, Caterpillar has a GF Score™ of 82/100, reflecting its overall financial health beyond just this single metric.
How does Caterpillar's 3-Year Sortino Ratio compare to DE and PCAR?
Caterpillar's 3-Year Sortino Ratio of 2.97 can be compared against companies in the Farm & Heavy Construction Machinery industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year Sortino Ratio for a Farm & Heavy Construction Machinery company?
A good 3-Year Sortino Ratio depends on the Farm & Heavy Construction Machinery industry context. However, 3-Year Sortino Ratio should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high 3-Year Sortino Ratio mean?
A high 3-Year Sortino Ratio can signal that a stock is expensive relative to its fundamentals. 3-Year Sortino Ratio measures the additional return that an investor receives per unit of the downside risk over the past three years. View historical data for Caterpillar and its competitors. Caterpillar's current 3-Year Sortino Ratio is 2.97. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Caterpillar stock overvalued right now?
Caterpillar (XSWX:CAT) has a current 3-Year Sortino Ratio of 2.97. The stock's GF Value™ is CHF351.39, compared to a current price of CHF710.30 — trading 102.1% above its estimated fair value. The current 3-Year Sortino Ratio is 2.97. Caterpillar's overall GF Score™ is 82/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 3-Year Sortino Ratio calculated?
3-Year Sortino Ratio is calculated from a company's financial statements. For Caterpillar (XSWX:CAT), the current 3-Year Sortino Ratio is 2.97 as of Aug. 08, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Caterpillar (XSWX:CAT) Overvalued in 2026?
Based on GuruFocus' analysis, Caterpillar stock appears to be overvalued.
The current stock price of CHF710.30 is trading 102.1% above its estimated GF Value™ of CHF351.39.
Key valuation signals for XSWX:CAT:
3-Year Sortino Ratio: 2.97
GF Value™: CHF351.39 vs. price of CHF710.30 (102.1% above fair value)
No single metric tells the full story. See the XSWX:CAT stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Caterpillar is the world's leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Its reporting segments are construction, resource, energy, and transportation. Market share approaches 20% across many products. Caterpillar operates a captive finance subsidiary to facilitate sales. The firm has a global reach that is approximately evenly balanced between the US and the rest of the world. Construction skews more domestic, while the other divisions are more geographically diversified. An independent network of over 150 dealers operates approximately 2,800 facilities, giving Caterpillar reach into about 190 countries for sales and support services.
82GF Score
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