IRVING, Texas - Caterpillar Inc. (NYSE: NYSE:CAT), a global leader in construction and mining equipment, announced Wednesday that its Board of Directors has decided to maintain the company's quarterly dividend at $1.41 per share. The dividend is scheduled to be paid on November 20, 2024, to shareholders who are on record as of October 21, 2024.
This decision marks Caterpillar's commitment to its long-standing policy of returning value to its shareholders. The company has a history of paying out a cash dividend annually since its establishment and has been issuing quarterly dividends without interruption since 1933. With the forthcoming dividend distribution, Caterpillar will extend its track record of providing increased annual dividends to its shareholders for 31 consecutive years. This achievement underscores its status as a member of the S&P 500 Dividend Aristocrats Index, which is composed of companies with a history of consistently increasing dividends.
Caterpillar Inc. reported sales and revenues of $67.1 billion in 2023, cementing its position as the preeminent manufacturer in its industry. The company's product lineup includes construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Caterpillar has been instrumental in supporting the construction of a better and more sustainable world for nearly a century. The company prides itself on innovation and the value its products and services provide to customers, facilitated by a comprehensive global dealer network.
The company operates primarily in three segments: Construction Industries, Resource Industries, and Energy & Transportation. Additionally, it offers financing and related services through its Financial Products segment.
The information regarding the dividend maintenance is based on a press release statement from Caterpillar Inc. This announcement is a key indicator of the company's financial health and its ability to continue rewarding its shareholders amidst the economic conditions prevailing as of October 2024. Caterpillar's consistent dividend payments reflect its financial stability and dedication to shareholder returns, an aspect that is closely monitored by investors and market analysts.
In other recent news, Caterpillar Inc. has seen various financial firms adjust their outlook on the company. Citi increased Caterpillar's price target to $445.00, maintaining a Buy rating, despite initiating a short-term downside view due to concerns about North American Construction Industries. CFRA, another financial research firm, raised Caterpillar's price target to $415, while retaining a Hold rating. BofA Securities also revised its price target for the company to $434, keeping a Buy rating.
These adjustments reflect recent developments in the company. Caterpillar reported a 4% year-over-year decrease in second-quarter sales, despite record levels of adjusted operating profit margins and adjusted profit per share. The company also announced a significant $20 billion share repurchase authorization, indicating a commitment to shareholder returns. Caterpillar aims for $28 billion in services revenues by 2026, in spite of a projected decrease in sales in Construction Industries and Resource Industries.
In addition to financial news, Caterpillar recently launched the Dynamic Energy Transfer (NYSE:ET) (DET) system for large mining trucks. This solution, developed entirely by Caterpillar, aims to reduce operating costs and greenhouse gas emissions by transferring energy to both diesel-electric and battery-electric mining trucks on-site.
InvestingPro Insights
Caterpillar's decision to maintain its quarterly dividend aligns with its strong financial position and commitment to shareholder returns. According to InvestingPro data, the company's dividend yield stands at 1.45%, with a impressive dividend growth rate of 8.46% over the last twelve months as of Q2 2024. This is further supported by an InvestingPro Tip highlighting that Caterpillar has raised its dividend for 10 consecutive years, underscoring the company's robust dividend policy.
The company's financial strength is evident in its revenue of $66.37 billion over the last twelve months as of Q2 2024, and an adjusted operating income of $14.13 billion for the same period. This solid performance is reflected in Caterpillar's market capitalization of $191.17 billion, positioning it as a prominent player in the Machinery industry, as noted in another InvestingPro Tip.
Investors may find it particularly interesting that Caterpillar is trading at a P/E ratio of 17.87, which is considered low relative to its near-term earnings growth potential, according to an InvestingPro Tip. This suggests that the stock may be undervalued, offering a potential opportunity for investors.
For those seeking more comprehensive insights, InvestingPro offers 11 additional tips on Caterpillar, providing a deeper understanding of the company's financial health and market position.
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