Why Caterpillar Stock Rarely Shows Up In Dividend Portfolios

There are a couple companies that I’ve never written about that I regularly receive requests to cover–Caterpillar is one of them. To a lot of people, it seems like the perfect dividend growth stock. The company has a nice moat selling earthmoving equipment, as the fixed costs are so high that it is difficult for new companies to enter the field. Also, it tends to benefit from technological advancements because it can make more sophisticated equipments that tempts the customer base to buy the latest and greatest human-sized gadget.

The dividend has been excellent the past fifteen years–it has grown from $0.64 in 1999 to $3.08 this year. Other than paying out $0.70 in both 2001 and 2002, the dividend payment increased every year (perhaps most importantly during The Great Recession, when the 2008 payment of $1.62 was hiked to $1.68 in 2009). And since the early 1990s, the company … Read the rest of this article!