Dow Today: Caterpillar (CAT) Lower

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

The Dow Jones Industrial Average ( ^DJI) is trading down 86.0 points (-0.6%) at 13,387 as of Wednesday, Oct 10, 2012, 12:35 p.m. ET. During this time, 286.3 million shares of the 30 Dow components have changed hands vs. an average daily trading volume of 574.2 million. The NYSE advances/declines ratio sits at 1,026 issues advancing vs. 1,917 declining with 114 unchanged.
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Holding back the Dow today is Caterpillar (NYSE: CAT), which is lagging the broader Dow index with a $1.46 decline (-1.7%) bringing the stock to $83.29. This single loss is lowering the Dow Jones Industrial Average by 11.05 points or roughly accounting for 12.8% of the Dow's overall loss. Volume for Caterpillar currently sits at 5.1 million shares traded vs. an average daily trading volume of 7.4 million shares.

Caterpillar has a market cap of $55.82 billion and is part of the conglomerates sector and conglomerates industry. Shares are down 6.5% year to date as of Tuesday's close. The stock's dividend yield sits at 2.4%.

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. The company has a P/E ratio of 9.6, equal to the average conglomerates industry P/E ratio and below the S&P 500 P/E ratio of 17.7.

TheStreet Ratings rates Caterpillar as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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