Caterpillar Inc. (CAT), the largest maker of construction and mining equipment, has provided the best risk-adjusted return among its peers since financial markets hit bottom in 2009 as it made acquisitions and expanded in emerging markets such as China .
Caterpillar’s risk-adjusted gain of 4.5 percent in the three years through June 26 topped that of 20 competitors with sales of more than $2 billion in the Bloomberg Industries Construction & Mining Machinery Index, the BLOOMBERG RISKLESS RANKING shows. The Peoria, Illinois-based company also had the highest total return in the index at 157 percent and volatility below 75 percent of stocks.
Doug Oberhelman has announced at least $10.3 billion of acquisitions since he became chief executive officer almost two years ago, adding mining shovels, drills and gas-driven engines while building and expanding factories from Brazil to China. Customers replacing used machinery in the U.S. and Europe have supported Caterpillar’s recovery after financial markets plunged in late 2008. Earnings will more than quadruple in the three years through 2012, according to analysts’ estimates compiled by Bloomberg.
“Over the past three years, their key end-markets have had stronger growth such as the U.S. and Europe,” Stephen Volkmann , a New York-based analyst for Jefferies & Co. who has a buy rating on the shares, said in a telephone interview. “Caterpillar’s been pushing a lot of levers to maintain diversity.”
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