Caterpillar Maintains High Dividend For Now
- June 10, 2009
- Dividend News, Dividend Stocks, High Yield Dividend Stocks
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Equipment maker Caterpillar (CAT: 112.83 -1.06%) announced today that its Board of Directors has approved a quarterly cash dividend of $.42 per share.
Caterpillar’s current dividend yield now stands at 4.4%.
The dividend will be payable on August 20, 2009 to shareholders of record as of July 20, 2009.
“It is a tribute to Caterpillar’s strategic ‘trough’ planning and financial strength that we are maintaining the dividend rate in the face of the worst economic crisis since the Great Depression,” said Caterpillar Chairman and Chief Executive Officer Jim Owens. “Just as we have during previous downturns, Caterpillar is positioning itself to emerge from this recession as a stronger company, and I am pleased we are able to reward stockholders who have invested in our company,” Owens said.
Caterpillar has now paid a cash dividend every year since 1925.
However, the markets didn’t react positively to the dividend news, as CAT’s shares were down 2.9% to $37.13 in afternoon trading. Since the beginning of the year, Caterpillar’s stock has dropped almost 17%.
Investors remain concerned that Caterpillar’s dividend payout ratio may be too high. Wall Street only expects the company to earn $1.17 per share this year. However, at its current rate, Caterpillar will pay out $1.68 per share in dividends. Even 2010 earnings expectations are only for $1.54 per share. So continuing to pay such a high dividend may not be in the shareholders best interest.
