Caterpillar, Inc. (CAT) increased its quarterly cash dividends by 8% to $1.11 per share. With the increase, the company’s annualized dividend of $4.44 per share reflects a dividend yield of 1.9%. Shares were down 2.3% and closed at $234.65 on June 9.
Caterpillar manufactures construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.
The dividend is payable on August 20 to shareholders of record on July 30.
The company, a member of the S&P 500 Dividend Aristocrat Index has been paying cash dividends every year since inception and also boasts paying shareholders higher dividends for 27 consecutive years. (See Caterpillar stock analysis on TipRanks)
In Q1, the company reported adjusted earnings of $2.87 per share, up 74% year-over-year, and beat analysts’ estimates of $1.94 per share. Revenue was up 12% to $11.9 billion and surpassed the consensus estimate of $11.09 billion.
Stating that the earnings of machinery stocks tend to outperform in the first two years following an economic recovery, Deutsche Bank analyst Nicole Deblase recently reiterated a Buy rating on the stock and lifted the price target to $273 (from $259), implying 16.3% upside potential to current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 8 Buys, 6 Holds, and 1 Sell. The CAT average analyst price target of $251 implies 7% upside potential to current levels. Shares have gained 31% over the past six months.