Caterpillar, Inc. (CAT)

Caterpillar builds construction and mining equipment — its revenue follows investment cycles rather than consumer demand.

The main markets are construction, mining, energy and transport. Equipment is bought for projects, so demand arrives in waves: infrastructure programmes, the commodity price cycle and the cost of credit determine when customers refresh their fleets.

Aftermarket work adds substantial stability: parts, service and component rebuilds produce recurring revenue from an enormous installed base at margins well above new equipment sales. The dealer network is a separate asset that is hard to replicate.

The third part is a finance arm that lends to buyers: it supports sales but adds credit risk in downturns. Caterpillar has paid a dividend for many consecutive years and serves many investors as a barometer of global industrial activity.