CAT vs HON Stock Comparison: AI Score, Valuation, Performance and Upside
CAT and HON are both large US industrials with very different shapes. Caterpillar is concentrated in heavy equipment, so its results follow construction and mining cycles, cushioned by a large aftermarket service business. Honeywell is diversified, with aerospace as its most valuable engine, and is in the middle of separating itself into more focused companies. Cyclical concentration against diversification in transition.
Use this CAT vs HON comparison to decide which kind of cycle you want. Caterpillar's cycle is visible and commodity-linked, with aftermarket revenue softening the troughs. Honeywell's results are steadier but its near-term story is about a corporate restructuring, which introduces a different sort of risk that has little to do with industrial demand.
CAT holds the edge across 4 of 5 key metrics in this comparison. CAT has delivered stronger 1-year price return (+74.88% vs +1.89%), though HON has the better forward P/E setup (21.74x vs 24.75x for CAT). CAT leads on both revenue growth (24.00%) and operating margin (22.18%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies similar upside for both: +21.91% for CAT and +21.46% for HON.
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- Want direct exposure to construction, mining, and power generation capital spending
- Value aftermarket parts and service revenue as a cyclical cushion
- Believe data center power demand supports the engines and turbines business
- Accept cyclicality and dealer inventory volatility in reported results
- Want aerospace aftermarket exposure inside a diversified industrial
- Believe the portfolio separation will narrow the conglomerate discount
- Prefer end-market diversification to single-cycle concentration
- Accept execution and timing risk around the restructuring
| Metric | CAT | HON |
|---|---|---|
| AI scorei | 68.2 | 41.8 |
| AI ranki | #48 | #901 |
| Latest closei | $821.58 | $212.55 |
| 1M returni | -0.04% | -3.68% |
| 6M returni | +18.14% | -4.74% |
| 1Y returni | +74.88% | +1.89% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | CAT | HON |
|---|---|---|
| 1Y ago | $17.72K (+77.2%) started 2025-09-25 | $10.23K (+2.3%) started 2025-09-25 |
| 5Y ago | $47.69K (+376.9%) started 2021-09-27 | $11.43K (+14.3%) started 2021-09-27 |
| 10Y ago | $154.1K (+1441.0%) started 2016-09-26 | $28.05K (+180.5%) started 2016-09-26 |
Hypothetical — past performance does not guarantee future results.
| Metric | CAT | HON |
|---|---|---|
| Market capi | $367.85B | $68.91B |
| Trailing P/Ei | 34.48 | 8.36 |
| Forward P/Ei | 24.75 | 21.74 |
| Price/Salesi | 2.63 | 3.75 |
| EV/Revenuei | 5.45 | 2.50 |
| Analyst targeti | $975.61 | $264.09 |
| Target upsidei | +21.91% | +21.46% |
| Metric | CAT | HON |
|---|---|---|
| Revenue growthi | 24.00% | 4.30% |
| Earnings growthi | 68.20% | 263.90% |
| EPS growthi | +68.20% | +263.90% |
| FCF margini | +6.76% | +6.86% |
| Operating margini | 22.18% | 20.25% |
| Profit margini | 14.51% | 21.58% |
| ROIC proxyi | 56.97% | 46.58% |
| Return on equityi | 56.97% | 46.58% |
| Dividend yieldi | 0.80% | 1.29% |
| Payout ratioi | 26.01% | 36.14% |
| Dividend growth streaki | No increase yet | No increase yet |
| Betai | 1.60 | 0.92 |
| Debt/equityi | 232.78 | 185.37 |
| Current ratioi | 1.37 | 1.21 |
| Quick ratioi | 0.78 | 0.76 |
Over the past year, CAT and HON have moved weakly in the same direction (correlation of 0.33), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | CAT | HON |
|---|---|---|---|
| 1Y | Growthi | +77.17% | +2.34% |
| CAGRi | +77.32% | +2.34% | |
| Volatilityi | 39.79% | 27.15% | |
| Sharpe ratioi | 1.53 | 0.06 | |
| Sortino ratioi | 2.41 | 0.08 | |
| Max drawdowni | 26.83% | 19.06% | |
| Current drawdowni | 22.85% | 14.57% | |
| Avg drawdowni | 7.35% | 7.92% | |
| Ulcer Indexi | 11.01% | 9.49% | |
| Max daily dropi | 6.91% | 6.00% | |
| Max wkly dropi | 11.99% | 10.46% | |
| 5Y | Growthi | +342.07% | +5.48% |
| CAGRi | +34.66% | +1.07% | |
| Volatilityi | 31.75% | 22.72% | |
| Sharpe ratioi | 0.96 | -0.04 | |
| Sortino ratioi | 1.45 | -0.05 | |
| Max drawdowni | 34.05% | 25.21% | |
| Current drawdowni | 22.85% | 14.57% | |
| Avg drawdowni | 8.76% | 9.73% | |
| Ulcer Indexi | 11.68% | 11.24% | |
| Max daily dropi | 8.64% | 7.62% | |
| Max wkly dropi | 17.13% | 14.33% | |
| 10Y | Growthi | +1126.52% | +130.36% |
| CAGRi | +28.50% | +8.71% | |
| Volatilityi | 31.47% | 24.05% | |
| Sharpe ratioi | 0.81 | 0.28 | |
| Sortino ratioi | 1.19 | 0.40 | |
| Max drawdowni | 43.36% | 43.01% | |
| Current drawdowni | 22.85% | 14.57% | |
| Avg drawdowni | 10.69% | 8.33% | |
| Ulcer Indexi | 13.93% | 10.74% | |
| Max daily dropi | 14.28% | 12.09% | |
| Max wkly dropi | 24.36% | 24.70% |
| Category | CAT | HON |
|---|---|---|
| Company | Caterpillar Inc. | Honeywell International Inc. |
| Sector | Industrials | Industrials |
| Industry | Farm & Heavy Construction Machinery | Conglomerates |
| Core business | Manufacturer of construction and mining equipment, with an energy and transportation segment selling engines, turbines, and generator sets, plus a captive finance arm. Sells through an independent dealer network that also drives aftermarket parts and service revenue. | Diversified industrial company spanning aerospace components and avionics, building automation, energy and sustainability solutions, and industrial automation. It has been separating its portfolio into more focused independent businesses. |
| Investor focus | Dealer inventory changes, construction and mining capital spending, backup power and turbine demand from data centers, services revenue growth, and pricing versus cost. | Aerospace aftermarket growth, progress and terms of the portfolio separation, building automation orders, segment margins, and capital deployment. |
- Dealer network and installed base generate high-margin aftermarket parts and service revenue that cushions equipment downturns
- Energy and transportation segment benefits from data center backup power and turbine demand
- Strong pricing discipline and consistent capital return through dividends and buybacks
- Aerospace aftermarket is a large, high-margin, long-duration revenue stream tied to flight hours
- Diversification across end markets smooths results relative to single-cycle industrials
- Portfolio separation could unlock value by giving each business a clearer profile
- Equipment demand is cyclical and tied to construction and commodity capital spending
- Dealer inventory adjustments can swing reported revenue independently of end demand
- Mining equipment orders depend on commodity prices the company does not control
- The separation process is complex and carries execution, cost, and timing risk
- Short-cycle automation and warehouse-related businesses have been uneven
- Conglomerate structure has historically limited the valuation multiple
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