How to Buy CAT Shares Online in the UK

Although you might know Caterpillar Inc (CAT) from its globally recognized workwear boots, the firm’s core business centres on construction machinery. Additionally, CAT is also behind insurance and financial products.

CAT shares are listed on the New York Stock Exchange, and the firm forms part of the Fortune 100. As such, you can buy its shares relatively easy.

In this guide, we show you how to buy CAT shares online in the UK. We walk you through the investment process and discuss the best UK brokers to do this with.

Step 1: Find a UK Stock Broker to Buy CAT Shares 

CAT is a company listed on the New York Stock Exchange. As such, your first port of call will be to find a UK stock broker that gives you access to the US markets. There are hundreds of options in this respect, so making an investment can be done with ease.

However, knowing which platform to sign up with can be challenging. This is because you need to look at several factors – such as FCA regulation, payment methods, and of course – fees.

To help clear the mist, below we list the best UK stock brokers to buy CAT shares from.

1. Plus500 – Commission-Free Stock CFD Trading Platform

Plus500 is a great option if you are looking to ‘trade’ CAT stocks. This is because the provider offers over 2,000+ stock CFDs – including that of CAT. This means that you can speculate on the future price of CAT shares without taking ownership.

You will also have the option of entering a buy or sell position. In other words, whether you think Caterpiller shares will increase or decrease in value, Plus500 allows you to profit from this. Plus500 does not charge any trading commissions on any of its stock CFDs. In fact, this is the case across all of its asset classes. You can also trade CFDs in the form of indices, bonds, forex, hard metals, energies, interest rates, and even digital currencies.

An additional benefit of trading CAT shares via CFDs is that you can apply leverage. In simple terms, this means that you can trade with more capital than you have in your Plus500 account. You can apply leverage of up to 1:5 when trading CAT share CFDs. This means that a £500 account balance would permit a maximum trade size of £2,500. Other assets at Plus500- such as forex, indices, and commodities – come with even higher limits.

All trading activity at Plus500 can be completed online or via a native mobile app. The latter is available across Android and iOS devices. If you are interested in using Plus500 to trade CAT share CFDs, you can get started by opening an account and meeting a £100 minimum deposit. Supported payment methods include a debit/credit card, bank account, and e-wallet  – and all deposits/withdrawals are fee-free. Plus500UK Ltd is authorized & regulated by the FCA (#509909).

Pros:

Cons:

80.5% of retail investors lose money trading CFDs at this site

Step 2: Research CAT Shares UK

Before taking the plunge and investing in CAT, it is important to first do some research. Not only should you look at the relationship between the firm’s historical and current stock price, but also what the future holds.

After all, the general rule of thumb when investing in shares is to ride of market waves for at least five years. With that said, if you decide to trade CAT share CFDs, then you will need to focus on the short-term.

Taking all of this into account, below you will find some important information concerning CAT shares.

CAT Share Price History

Caterpillar Inc (CAT) was first launched in 1925. Just four years later, the firm was listed on the New York Stock Exchange. This makes it one of the oldest publicly-listed companies in the US. Naturally, this means CAT has executed several stock splits since its initial listing.

This includes four at 2-for-1 and one at 3-2. As such, when assessing the CAT share price history, we must do so at the stock’s adjusted price. In the 10 years prior to writing this page, CAT shares were priced at $75 per share. The stocks enjoyed a prolonger period of success, hitting heights of $170 per share in early 2018.

The shares have cooled off since, with current 52-week highs at the $150 level. In more recent times, CAT shares have had somewhat of a rollercoaster ride in 2020. For example, in mid-February, the stocks were priced at just over $136 per share. Like the vast bulk of the New York Stock Exchange, Caterpillar shares crashed as a result of the pandemic – reaching 52-week lows of $87.

This represents a decline of 36% in the space of just a few weeks. The good news for stockholders is the speed in which CAT shares have recovered. In fact, the firm is trading at $139 at the time of writing, meaning that it has already caught up to its pre-COV-19 levels.

CAT Shares Dividend Information

If you’re looking to buy shares in a firm that has a long-standing track record of paying dividends – it really doesn’t get much better than CAT. Crucially, the company has paid dividends every year for the last 87 years. Even more impressively, CAT is now officially in the Dividend Aristocrat club.

For those unaware, this means that the stock has increased the size of its dividend each and every year for at least 25 years. In the case of CAT, it is now in its 26th year.  In its most recent dividend distribution, this worked out at a trialling yield of 3.1%. Not amazing, but solid nonetheless.

We should also note that as of August 2020, CAT is yet to make any hints of a dividend cut or suspension as per the pandemic. Although this can’t be ruled out with any certainty, management at CAT will be keen to preserve its status as a Dividend Aristocrat.

Should I Buy CAT Today?

So now that we have covered both the recent price action of CAT shares – as well as its superb track-record of paying dividends, we now need to look at the fundamentals. That is to say, we need to explore what the future holds for CAT shares from an investment perspective.

Latest Earnings Report

A good starting point is to look at the firm’s latest earnings report. Put simply, the figures were a major disappointment for stockholders. This was, unfortunately, a result of the pandemic. After all, construction – which sits at the core of CAT’s business model, was heavily impacted by the COV-19 lockdown. This wasn’t just the case in the firm’s domestic market – but internationally, too.

At the forefront of this was a 31% reduction in revenue. This resulted in a 70%n drop in earnings per share. Crucially, at just $2.82, this was far short of its initial target of $8.50. With that being said, it is reasonable for investors to look past these numbers, not least because the pandemic was beyond the control of CAT.

Liquidity and Cash Flow

Although its most recent earnings report was less than favourable, the general consensus is that CAT is well-positioned to weather the COV-19 storm. First and foremost, CAT has a substantial market valuation of £75 billion – so it is well and truly a Fortune 100 company.

In terms of available liquidity, management at CAT has over $18.5 billion at its disposal. It also has access to just under $9 billion in enterprise cash. In even more positive news for stockholders, CAT was able to generate in excess of $500 million in free cash flow in the last quarter alone. Ultimately, cash is king during times of economic uncertainties.

Speed of Recovery Post-Crash

While there is no denying that the fundamentals is crucial, an equally important way to quantify the viability of an investment is to look at market sentiment. In the case of CAT, its shares very quickly recovered from the wider stock market crash that came to fruition in March 2020.

As we noted earlier, its shares dropped 36% in the space of just a few weeks. But, as of August 2020, Caterpiller shares are now worth ever-so-slightly more than they were before the crash. This is excellent news for shareholders that kept faith in the firm, as many stocks on the S&P 500 are still looking at double-digit losses for 2020.

CAT Shares Buy or Sell?

Although CAT yielded some below-par results in its most recent earnings report, its underlying business model remains strong. At the forefront of this is a substantial amount of free cash flows which will ensure the firm weathers itself through the uncertainties of COV-19. Crucially, investors will hope that CAT continues its 87-year run of paying dividends – 26 of which come as a Dividend Aristocrat.

The Verdict?

Although CAT is a US company listed on the New York Stock Exchange, buying its shares doesn’t need to be challenging. On the contrary, the process can be completed online from the UK in minutes.

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