Caterpillar (NYSE:CAT) to Repurchase $20.00 billion in Outstanding Shares

Caterpillar (NYSE:CAT) declared that its board has initiated a stock repurchase plan on Wednesday, June 12th, RTT News reports. The company plans to repurchase $20.00 billion in shares. This repurchase authorization authorizes the industrial products company to repurchase up to 12.7% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company’s board of directors believes its stock is undervalued.

Caterpillar Price Performance

Shares of Caterpillar stock traded up $0.93 during trading on Monday, hitting $322.40. 3,172,068 shares of the company’s stock traded hands, compared to its average volume of 2,610,189. The company has a market cap of $157.67 billion, a PE ratio of 14.56, a PEG ratio of 1.65 and a beta of 1.14. Caterpillar has a twelve month low of $223.76 and a twelve month high of $382.01. The company has a debt-to-equity ratio of 1.41, a current ratio of 1.35 and a quick ratio of 0.83. The firm’s fifty day moving average price is $346.79 and its 200 day moving average price is $325.09.

Caterpillar (NYSE:CAT) last announced its earnings results on Thursday, April 25th. The industrial products company reported $5.60 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $5.12 by $0.48. Caterpillar had a net margin of 16.79% and a return on equity of 58.61%. The company had revenue of $15.80 billion for the quarter, compared to analyst estimates of $16.07 billion. Analysts forecast that Caterpillar will post 21.81 earnings per share for the current year.

Caterpillar Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, August 20th. Investors of record on Monday, July 22nd will be paid a dividend of $1.41 per share. This represents a $5.64 dividend on an annualized basis and a dividend yield of 1.75%. This is an increase from Caterpillar’s previous quarterly dividend of $1.30. The ex-dividend date of this dividend is Monday, July 22nd. Caterpillar’s payout ratio is 23.48%.

Wall Street Analysts Forecast Growth

A number of analysts recently weighed in on CAT shares. TD Cowen raised their price objective on shares of Caterpillar from $338.00 to $340.00 and gave the stock a “buy” rating in a research note on Friday, April 26th. StockNews.com lowered shares of Caterpillar from a “strong-buy” rating to a “buy” rating in a research note on Tuesday, February 20th. Stifel Nicolaus lowered shares of Caterpillar from a “buy” rating to a “hold” rating and raised their price objective for the stock from $293.00 to $350.00 in a research note on Friday, April 26th. The Goldman Sachs Group raised their price objective on shares of Caterpillar from $357.00 to $408.00 and gave the stock a “buy” rating in a research note on Tuesday, April 16th. Finally, JPMorgan Chase & Co. lifted their target price on shares of Caterpillar from $385.00 to $435.00 and gave the company an “overweight” rating in a research note on Tuesday, April 16th. One equities research analyst has rated the stock with a sell rating, ten have given a hold rating and eight have given a buy rating to the stock. According to MarketBeat, the company presently has an average rating of “Hold” and a consensus target price of $323.35.

Insider Buying and Selling at Caterpillar

In other news, Director David Maclennan bought 500 shares of the stock in a transaction on Friday, May 3rd. The stock was purchased at an average price of $337.39 per share, with a total value of $168,695.00. Following the completion of the purchase, the director now owns 5,738 shares of the company’s stock, valued at $1,935,943.82. The purchase was disclosed in a filing with the SEC, which is accessible through this hyperlink. In related news, insider Cheryl H. Johnson sold 1,508 shares of the stock in a transaction on Thursday, May 30th. The shares were sold at an average price of $340.00, for a total transaction of $512,720.00. Following the completion of the transaction, the insider now owns 20,023 shares in the company, valued at $6,807,820. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director David Maclennan bought 500 shares of Caterpillar stock in a transaction that occurred on Friday, May 3rd. The shares were acquired at an average price of $337.39 per share, with a total value of $168,695.00. Following the acquisition, the director now directly owns 5,738 shares of the company’s stock, valued at approximately $1,935,943.82. The disclosure for this purchase can be found here. Insiders own 0.33% of the company’s stock.

About Caterpillar

Caterpillar Inc manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools.