Caterpillar Inc. has strengthened its dividend-growth credentials in 2026, raising its quarterly dividend by 8% to $1.63 per share in June, which brings the annualized payout to $6.52 per share and marks the 32nd consecutive year of increases. The hike is backed by stronger cash generation, with second-quarter enterprise operating cash flow of $4.4 billion and a record $5.1 billion in MP&E free cash flow, while management expects full-year MP&E free cash flow to land in the top half of its $6 billion to $15 billion target range. However, the stock's forward yield is only about 0.79% at a share price of $827.90 on August 21, making it more attractive for dividend growth than for current income. The company also spent $6.522 billion on share repurchases in the first half of 2026, compared with $1.399 billion in dividends, indicating a combined capital-return strategy. While the dividend appears well supported, the low starting yield and cyclical nature of the business raise questions about whether the current share price offers enough upside.
Caterpillar IncRaises dividend 8% and strong cash flow support capital returns
