Core Insights - The reshoring trend and the push for supply-chain independence are significantly transforming U.S. manufacturing, driven by factors such as post-pandemic vulnerabilities, trade disputes, and recent tariff policies [1][2]. Industry Overview - The imposition of import tariffs on various products has made offshore production costly, prompting companies to relocate manufacturing back to the U.S. to stabilize supply chains and avoid tariffs [2]. - Favorable U.S. government policies, including the CHIPS & Science Act and the Inflation Reduction Act (IRA), are encouraging investments in sectors like semiconductors and clean energy, which in turn is boosting demand for related industries [3]. Company Focus: Caterpillar Inc. (CAT) - Caterpillar has shifted its construction equipment production from Japan to Georgia and Texas, enhancing its supply chain efficiency and reducing transit times [6]. - The company plans to invest $725 million in its engine manufacturing facility in Lafayette, IN, to improve workforce skills and meet rising demand for power generation engines [6]. - CAT's shares have increased by 60.6% over the past year, with earnings growth expected to be 19% in 2026 [8]. Company Focus: EnerSys (ENS) - EnerSys is relocating battery production to Kentucky to avoid tariffs and leverage IRA tax credits, ceasing operations in its Mexican facility [10]. - The company anticipates benefiting from the IRA, expecting its products to qualify for tax credits, which will support its high-density battery portfolio expansion [11]. - ENS shares have risen 62.6% in the past year, with projected earnings growth of 20.7% for fiscal 2027 [12]. Company Focus: GE Aerospace - GE Aerospace is investing $1 billion in U.S. manufacturing to enhance production capabilities and meet growing demand for engines and services [13][16]. - This investment is expected to create approximately 5,000 jobs in the U.S. and focuses on improving engine quality and delivery [16]. - GE's shares have surged 87.5% over the past year, with earnings growth projected at 13.1% for 2026 [17].

Financial Performance - FY2025 - Deere & Company's FY2025 net sales and revenues reached $51716 million, a 13% increase compared to $45684 million in FY2024[7] - Net sales for equipment operations in FY2025 were $44759 million, up 15% from $38917 million in FY2024[7] - Net income attributable to Deere & Company for FY2025 was $7100 million, a 29% increase compared to $5027 million in FY2024[7] - Diluted earnings per share (EPS) for FY2025 were $2552, a 28% increase compared to $1850 in FY2024[7] Financial Performance - 4Q2025 - Net sales and revenues for 4Q2025 were $12394 million, a 11% increase compared to $11143 million in 4Q2024[9] - Net sales for equipment operations in 4Q2025 were $10579 million, up 14% from $9275 million in 4Q2024[9] - Net income attributable to Deere & Company for 4Q2025 was $1065 million, a 14% decrease compared to $1245 million in 4Q2024[9] - Diluted earnings per share (EPS) for 4Q2025 were $393, a 14% decrease compared to $455 in 4Q2024[9] Segment Performance - 4Q2025 - Production & Precision Ag net sales in 4Q2025 were $4740 million, a 10% increase compared to $4305 million in 4Q2024[11] - Small Ag & Turf net sales in 4Q2025 were $2457 million, a 7% increase compared to $2306 million in 4Q2024[13] - Construction & Forestry net sales in 4Q2025 were $3382 million, a 27% increase compared to $2664 million in 4Q2024[24] Financial Outlook - FY2026 - Deere & Company forecasts a net income attributable to the company of $40-475 billion for FY2026[35] - The company anticipates an effective tax rate of 25-27% for FY2026[35] - Net operating cash flow for FY2026 is projected to be $40-50 billion[36] - Capital expenditures are expected to be approximately $14 billion[37]

Core Insights - The tractor manufacturing industry, particularly Deere, is facing challenges due to elevated costs and low crop prices, leading to production cuts and layoffs [3] - Deere's smart industrial strategy, launched in 2020, aims to integrate advanced technologies and has started to show improvements in income and margins despite adverse conditions [5] - For fiscal year 2025, Deere reported a 12% decline in worldwide net sales to $45.7 billion and a 29% drop in net income to $5 billion, impacted by tariffs and a sluggish farm economy [6] Financial Performance - In Q4 of fiscal year 2025, Deere reported net sales of $12.3 billion, an 11% increase year-over-year, driven by a 10% increase in production and precision agriculture and a 27% increase in construction and forestry [9] - Despite the sales increase in Q4, net income was nearly $1.1 billion, down 14% from the previous year due to higher production costs and tariffs [9] Future Outlook - Deere's CEO expressed optimism that fiscal year 2026 will mark the bottom of the current down cycle in the tractor market, with a forecasted sales decline of 15% to 20% for large agriculture products in the U.S. and Canada [8] - Construction and forestry sales are expected to either grow by 5% or remain flat in the same region [8]

Financial Performance - Total revenue for Q3 FY2026 was $644.5 million, a decrease of 5.2% compared to $679.8 million in Q3 FY2025 [8, 27, 29] - Pre-tax income for Q3 FY2026 was $2.8 million [8, 31] - Diluted earnings per share for Q3 FY2026 were $0.05, a decrease of 28.6% [8, 29] - For the first nine months of FY2026, total revenue was $1.7853 billion, down 8.1% from $1.9422 billion in the same period of FY2025 [32, 34, 36] - The company anticipates a loss of $2 to $4 million in Q4 due to the divestiture of dealership operations in Germany [21] Segment Performance - Agriculture segment revenue is expected to be down 15% to 20% for FY26 [12, 45] - Construction segment revenue is expected to be down 5% to 10% for FY26 [16, 45] - Europe segment revenue is expected to be up 35% to 40% for FY26 [21, 45] - Australia segment revenue is expected to be down 20% to 25% for FY26 [26, 45] Balance Sheet - Equipment inventory decreased by $97 million as of October 31, 2025, compared to January 31, 2025 [39] - Used equipment inventory decreased by $96 million [39] - Rental fleet assets decreased to $71 million as of October 31, 2025, from $76 million as of January 31, 2025 [39]

Core Insights - Caterpillar Inc. and Deere & Company are leading players in the heavy machinery sector, with Caterpillar focusing on construction and mining, while Deere specializes in agriculture and forestry [1] - Caterpillar's market capitalization is approximately $257 billion, while Deere's is around $129 billion, indicating their significant roles in industrial and agricultural cycles [2] Caterpillar Overview - In Q3 2025, Caterpillar achieved record revenues of $17.6 billion, a 9.5% increase year-over-year, primarily due to a 10% rise in sales volume [2][8] - The company anticipates modest revenue growth for 2025, with projected revenues between $42 billion and $72 billion, and adjusted operating margins expected between 10% and 22% [3] - Caterpillar is poised to benefit from the U.S. Infrastructure Investment and Jobs Act, which is expected to drive demand for its construction equipment [4] - The company is also experiencing strong demand for reciprocating engines for data centers, planning to double output through a multi-year capital investment [5] - Caterpillar aims to increase service revenues from $14 billion in 2016 to $28 billion by 2026, capitalizing on high-margin aftermarket parts and services [6] Deere Overview - Deere has faced eight consecutive quarters of revenue declines, with lower earnings attributed to reduced volumes in agriculture and construction sectors [7] - The company expects a decline in sales volumes for 2025, with a projected net income between $4.75 billion and $5.25 billion, reflecting a 29.6% decrease from the previous year [9] - Despite current challenges, long-term demand for agricultural equipment is expected to rise due to global food demand and the need to replace aging machinery [11][12] Financial Estimates Comparison - Caterpillar's 2025 sales estimate is $66.11 billion, indicating a 2% year-over-year growth, while earnings per share are projected to decline by 16% [13] - Deere's 2025 sales estimate is $38.31 billion, reflecting a 14.4% year-over-year decline, with earnings per share expected to fall by 27.7% [14] Stock Performance and Valuation - Year-to-date, Caterpillar's stock has increased by 50.5%, compared to Deere's 12.4% gain [15] - Caterpillar trades at a forward earnings multiple of 25.51X, while Deere's multiple is 23.49X [16] - Caterpillar's return on equity stands at 47.16%, significantly higher than Deere's 21.97%, indicating more efficient use of shareholder funds [19] Investment Outlook - Caterpillar shows stronger momentum with rising volumes and renewed revenue growth, making it a more favorable investment compared to Deere, which faces near-term pressures [20][21]

Core Insights - Alta Equipment Group Inc. has faced challenges in its Q3 2025 earnings, resulting in a price target cut by DA Davidson from $8 to $7 with a Neutral rating [1][2] Financial Performance - The company reported a loss per share of $1.31 in Q3 2025, with an organic revenue reduction of 5.8% year-over-year [1][2] - Total equipment sales were impacted negatively during the quarter, although demand showed improvement towards the end of September and into October, marking it as the strongest month for new equipment sales [2] Business Segments - Alta Equipment Group operates integrated equipment dealership platforms across the US and Canada, with three main segments: Material Handling, Construction Equipment, and Master Distribution [3]

Core Insights - Dividends are favored by investors for providing passive income and limiting drawdowns in other positions [1][12] - Companies with a history of increasing dividends, such as Dividend Aristocrats, are particularly attractive for investors [2][12] Company Summaries Coca-Cola (KO) - Coca-Cola is part of both the Dividend Aristocrats and Dividend Kings, indicating strong dividend reliability [3] - The current dividend yield is 2.8% annually, with a five-year annualized dividend growth rate of 4.8% [3] Caterpillar (CAT) - Caterpillar is recognized as the world's largest construction equipment manufacturer [6] - The current dividend yield is 1.0%, which is relatively low, but the five-year annualized dividend growth rate is 8.2%, compensating for the lower yield [6] McDonald's (MCD) - McDonald's is a well-known global restaurant chain [9] - The current dividend yield is 2.3%, with a five-year annualized dividend growth rate of 8.2% [9]

Core Insights - CNH Industrial reported third quarter consolidated revenues of $4.4 billion, a decrease of 5% compared to Q3 2024, driven by decreased industry demand and ongoing channel destocking [1][4] - The company’s net income for the quarter was $67 million, down 78% from $310 million in the same period last year, with diluted earnings per share (EPS) falling to $0.06 from $0.24 [1][4] - Despite the challenging market conditions, CNH is focused on cost management and operational excellence, while also increasing net sales guidance but lowering profit guidance due to tariff headwinds and an unfavorable geographic sales mix [1][2] Financial Performance - Consolidated revenues for Q3 2025 were $4.4 billion, down from $4.65 billion in Q3 2024 [4] - Net sales from Industrial Activities were $3.7 billion, a decrease of 7% year-over-year [4] - Adjusted EBIT for Industrial Activities fell to $104 million, down 69% from $336 million in Q3 2024, with an adjusted EBIT margin of 2.8% compared to 8.4% in the previous year [4][5] - The gross profit margin for Industrial Activities decreased to 19.1%, down 260 basis points from 21.7% in Q3 2024 [4] Segment Performance Agriculture - Agriculture net sales decreased by 10% to $2.96 billion, primarily due to lower shipment volumes and decreased industry demand in North America [7][8] - Adjusted EBIT for the Agriculture segment dropped to $137 million, down 59% from $336 million in Q3 2024, with an adjusted EBIT margin of 4.6% [9] Construction - Construction net sales increased by 8% to $739 million, reflecting higher shipment volumes in North America and EMEA [10][11] - Adjusted EBIT for the Construction segment decreased to $14 million, down 65% from $40 million in Q3 2024, with an adjusted EBIT margin of 1.9% [11] Financial Services - Financial Services revenues increased by 4% to $684 million, driven by higher yields in Brazil [12] - Net income for Financial Services was $47 million, a decrease of 40% compared to Q3 2024, primarily due to increased risk costs and lower volumes [13] Outlook - The company updated its 2025 outlook, projecting Agriculture segment net sales to decline between 11% and 13% year-over-year, and Construction segment net sales to decrease between 3% and 5% [17] - Adjusted diluted EPS is expected to be between $0.44 and $0.50 [18] - CNH is focusing on reducing operating costs and managing SG&A and R&D expenses to mitigate margin erosion [15][16]

Core Viewpoint - Investors can create a portfolio that allows for monthly dividend payouts by strategically selecting stocks that pay dividends in different months [1][10]. Group 1: Stock Selection - Coca-Cola (KO) is part of the Dividend Aristocrats and Dividend Kings groups, indicating strong dividend reliability and a history of rewarding shareholders [3][11]. - Caterpillar (CAT) is the largest construction equipment manufacturer and also a member of the Dividend Aristocrats, showcasing its reliability in dividend payments [5][11]. - McDonald's (MCD) has an annual yield of 2.3% and an 8.2% five-year annualized dividend growth rate, making it a strong candidate for dividend income [8][11]. Group 2: Dividend Strategy - By combining Coca-Cola, Caterpillar, and McDonald's, investors can achieve a portfolio that provides consistent monthly dividends [2][11]. - The strategy of selecting stocks with staggered dividend payment months allows for a steady income stream, which is appealing to investors [10].

Financial Data and Key Metrics Changes - The company recorded revenue of $422.6 million for Q3 2025, representing a 5.8% organic reduction compared to the previous year [16] - Adjusted EBITDA for the quarter was $41.7 million, slightly down year-over-year on a pro forma basis, primarily due to reduced episodic equipment sales in the construction equipment segment [24] - Free cash flow before rent-to-sale decisioning was approximately $25 million for the quarter, totaling around $80 million year-to-date [24] Business Line Data and Key Metrics Changes - In the material handling segment, new and used equipment sales were down $1.6 million year-over-year but showed a sequential increase [18] - The construction equipment segment experienced a drop in equipment sales by $18.7 million compared to Q3 2024, but October sales indicated a potential recovery [20] - Product support revenues in the material handling segment were flat year-over-year, but up nearly 4% sequentially from Q2 [19] Market Data and Key Metrics Changes - The backlog in material handling remains over $100 million, providing visibility for the next several quarters [6][18] - Industry data suggests that the general-purpose construction markets have bottomed out, positioning the company for growth as replenishment gains momentum in 2026 [9] - The Midwest and Canadian markets for material handling remain soft, primarily due to automotive and general manufacturing weakness [10] Company Strategy and Development Direction - The company is focusing on optimizing its business model by divesting non-core operations, such as the dock and door division, to concentrate resources on core dealership operations [10][11] - The strategy includes enhancing product support capabilities to drive recurring revenue and lifetime customer relationships [11] - The company aims to capitalize on the ongoing reindustrialization of key U.S. regions, particularly in the power and utility sector [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in demand, particularly in construction equipment, as deferred demand from Q3 is expected to flow into Q4 [12] - The enactment of the Big Beautiful Bill is viewed as a net positive, enhancing liquidity and reducing future cash taxes [25] - Management believes the industry is turning a corner, with Alta well-positioned to capture the upswing in demand [12] Other Important Information - The company completed the divestiture of its dock and door division, which is expected to have minimal impact on the EBITDA guidance for 2025 [52] - The company ended the quarter with approximately $265 million in cash and availability on its revolving line of credit, providing ample capacity to navigate the current business climate [25] Q&A Session Summary Question: Discussion on construction equipment and anticipated upswing - Management indicated that October's performance could signal a positive trend for sales and margins in construction equipment [38] Question: Factors affecting gross margins - Management noted that while gross margins are currently flat year-over-year, there are signs of stabilization in used equipment prices, which could lead to an upswing in margins [40] Question: Movement in manufacturing and material handling - Management clarified that the lift in material handling is more related to fleet replenishment rather than a significant increase in market demand [41] Question: Context of backlog in material handling - The backlog has decreased from $125 million at the start of the year to the low $100s, primarily due to improved lead times rather than a significant drop in demand [46] Question: Strong aftermarket gross margins - Management attributed strong aftermarket gross margins to mid-year price increases and improved operational efficiencies [50] Question: Rationale behind the divestiture of the dock and door unit - The divestiture was strategic, as the dock and door business did not align well with the core operations, and it was determined that it would be better managed by a dedicated entity [52]