Caterpillar's Dividend Has Grown for 32 Consecutive Years. Its Dividend Yield Is Now Down to 0.75%.
The construction equipment and heavy machinery company has experienced explosive growth due to AI-related build-outs.
Overview
Caterpillar (NYSE: CAT) is known for its dependable dividend, having raised its payout for more than 30 years. The renowned income investment recently approved another substantial increase. So why is Caterpillar's dividend yield the lowest in its history?
The construction and heavy machinery manufacturer has seen its stock surge faster than its dividend growth, resulting in a lower yield. Shares of Caterpillar have skyrocketed more than 55% so far this year, and over 110% in the past 12 months as of this writing.
Details
As AI infrastructure build-outs accelerate, so does the demand for construction equipment. The increase in Caterpillar's share price has now left potential investors with a conundrum. The stock is trading at a hefty premium, particularly compared to its historical averages. The 0.75% yield means new investors aren't necessarily buying for the high income as much as for the potential of continued growth.
Source
Originally published at www.fool.com.