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Here's What Will Make Caterpillar Stock a Buy

TheMotleyFool

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Here's What Will Make Caterpillar Stock a Buy: https://g.foolcdn.com/editorial/images/764202/construction-stock-to-buy-infrastructure-stock-to-buy-in-2024.jpg

Caterpillar (NYSE: CAT) just delivered one of the best earnings reports in the industrial sector this earnings season. As the chart below demonstrates, its stock price continues to rise. However, the question now is what will make the stock a buy for investors. Here's what you need to know.

There are three key answers to this question, and I will flesh them out below:

The stock is an excellent value based on its trailing earnings and free cash flow (FCF). For example, earnings per share (EPS) of $21.21 puts it on just 15.2 times earnings, and machine, energy transportation (ME) FCF of $10 billion puts it on 16.4 times FCF.

Source Fool.com