CAT Value Scorecard - Caterpillar Inc.

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

34/60

low-moderate value score

Earnings & returns

EPS Trend

4/5

Diluted EPS: $12.64 (2022), $20.12 (2023), $22.05 (2024), $18.81 (2025). It rose every year but one and ended above 2022; the framework scores that as 4.

ROE Trend

5/5

ROE (net income / common equity): 42.3% (2022), 53.0% (2023), 55.4% (2024), 41.7% (2025). Median 47.6%, lowest 41.7%; the framework scores a median above 20% as 5.

ROIC

4/5

ROIC of 18.0%: operating income of $11.15B divided by $62.03B of capital (total assets $98.58B minus current liabilities $36.56B), fiscal year to Dec 31, 2025, as filed in the 10-K (SEC EDGAR). The framework scores 15-20% as 4.

Profit Margins

4/5

Net margin of 14.5%; the framework scores 10-20% as 4; gross margin 29.7%, operating margin 22.2%.

Balance sheet & cash

Debt-to-Equity

2/5

Debt-to-equity of 2.33; the framework scores 1.5-2.5 as 2 (total debt $45.15B, total cash $5.94B).

Free Cash Flow

3/5

Free cash flow (operating cash flow minus capital expenditure): $5.17B (2022), $9.79B (2023), $8.82B (2024), $7.45B (2025). It ended above 2022 but did not rise in 2 of 3 years; the framework scores that as 3.

Retained Earnings

5/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $43.51B (2022), $51.25B (2023), $59.35B (2024), $65.45B (2025). It rose every year; the framework scores that as 5.

Valuation models

Graham IV

1/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $23.23 x (8.5 + 2 x 0.0) x (4.4 / 4.5) = $193.07 (EPS CAGR -3.3% floored at 0%; the formula returns a negative value below -4.25% growth). Current price $730.76; price is 278.5% above the model value.

DCF Value

1/5

FCF/share = $10.984, stage 1 growth = 0.4% for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $42.11, PV of terminal value = $102.38, DCF value = $144.48. Current price $730.76; price is 405.8% above the model value.

Margin of Safety

1/5

Graham value $193.07 (price is 278.5% above the model value); DCF value $144.48 (price is 405.8% above the model value).

Price-to-Book

1/5

P/B of 17.32; the framework scores above 5.0 as 1.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 6 of 10 years (2016-2025); lowest 2.4%, highest 24.6%.

Gross margin, each year

Between 27.2% and 99.9% over 10 years (a range of 72.7 points).

Competition, in the company’s own words · 10-K filed Feb 13, 2026

Caterpillar products and services are sold worldwide into a variety of highly competitive markets. In all markets, we compete on the basis of product performance, customer service, quality and price. From time to time, the intensity of competition results in price discounting in a particular industry or region. Such price discounting puts pressure on margins and can negatively impact operating profit. Outside the

The opening of the company’s “Competitive Environment” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

3/5

Capital allocation, 2022-2025: dividends or buybacks paid in every year (pass); $32.51B paid out against $31.23B of free cash flow (fail: paid out more than free cash flow); total debt $36.99B to $43.33B, up 17.1%, 3.0x EBITDA (fail: up more than 10% and above 2x EBITDA); shares outstanding 0.52B to 0.47B, down 9.9% (pass). 2 of 4 tests passed; the framework scores that as 3.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $23.23, g = 0.0%, Y = 4.5
    g floored at 0.0% (3-year EPS CAGR was -3.3%; below -4.25% the formula returns a negative value)
    IV = $193.07
    Current price $730.76 vs Graham value $193.07 — price is 278.5% above the model value.

  DCF:
    FCF/share = $10.984
    Stage 1 growth = 0.4% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
      Y1: $11.028 → PV $10.025
      Y2: $11.072 → PV $9.150
      Y3: $11.116 → PV $8.352
      Y4: $11.161 → PV $7.623
      Y5: $11.205 → PV $6.958
    Stage 1 PV sum = $42.11
    Terminal value at end of Y5 = $164.88
    PV of terminal value = $102.38
    DCF value = $144.48
    Current price $730.76 vs DCF value $144.48 — price is 405.8% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $730.76. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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