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NEW YORK (TheStreet) -- Shares of Caterpillar (CAT) - Get Free Report closed up by 0.09% to $87.92 in Wednesday's trading session on reports that the company invested in Yard Club, a San Francisco startup that allows contractors to easily rent machinery to one another, CNBC reports.  

Earlier this month, construction giant Caterpillar put in an undisclosed amount to a new round of funding, according to CNBC

"This is about making the process easier and expanding the contractors renters can connect with," Yard Club's CEO and founder Colin Evan told CNBC.

From the partnership, Caterpillar hopes to reach more customers. "The Cat dealer will use this tool as another avenue to strengthen customer relationships by increasing the utilization rates of heavy equipment and lowering the total cost of equipment ownership," company VP Phil Kelliher said in a statement. 

The company's partnership with Yard Club is one of the ways it's embracing new technology before it disrupts existing businesses like heavy machinery sales, CNBC said. 

TheStreet Ratings team rates CATERPILLAR INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CATERPILLAR INC (CAT) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity, attractive valuation levels, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 20.5% when compared to the same quarter one year prior, going from $922.00 million to $1,111.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, CATERPILLAR INC's return on equity exceeds that of both the industry average and the S&P 500.
  • 36.31% is the gross profit margin for CATERPILLAR INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.74% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.5%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: CAT Ratings Report