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CAT Keeps Dividend Unchanged: Is Another Hike on the Horizon?
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Key Takeaways
Caterpillar maintains its $1.63 quarterly dividend, with the next payout scheduled for Nov. 19, 2026.
CAT returned $7.9 billion to shareholders in first-half 2026 and raised its free cash flow outlook.
Caterpillar's record $72 billion backlog and stronger demand support its raised 2026 sales growth outlook.
Caterpillar Inc. (CAT - Free Report) continues to demonstrate its commitment to shareholder returns, supported by consistent dividend payments, robust cash flow generation and improving business momentum. The company maintained its quarterly dividend at $1.63 per share, with the next payout scheduled for Nov. 19, 2026.
Caterpillar last increased its quarterly dividend by 8% to $1.63 per share, marking its sixth consecutive year of high-single-digit dividend growth. The company has increased its annual dividend for 33 consecutive years and has been a member of the S&P 500 Dividend Aristocrats Index since 2019. CAT has paid cash dividends every year since its inception, with uninterrupted quarterly payments dating back to 1933.
Over the past five years, Caterpillar has increased its dividend at an annualized rate of 8.10%, reflecting its commitment to rewarding shareholders. The company's dividend payout ratio of 25.36% is slightly above the industry average of 25.31%. CAT’s current dividend-to-free-cash-flow ratio stands at 0.30, reflecting a healthy and sustainable dividend profile.
Caterpillar's healthy cash position and disciplined capital allocation strategy strengthen its ability to sustain dividend growth. In 2025, the company spent $5.2 billion on share repurchases and $2.7 billion on dividends. In the first half of 2026, CAT returned a combined $7.9 billion to shareholders through dividends and share repurchases.
The company exited second-quarter 2026 with $6.7 billion in enterprise cash and an additional $1.5 billion in liquid marketable securities, providing ample financial flexibility.
Management raised its full-year 2026 Machinery, Power & Energy (MP&E) free cash flow outlook to the upper half of its annual target range of $6-$15 billion. Capital expenditure expectations remained unchanged at approximately $3.5 billion. Caterpillar also reiterated its commitment to returning all MP&E free cash flow to shareholders substantially over time
Improving Business Momentum Strengthens CAT's Dividend Prospects
Caterpillar's improving operating performance further supports its ability to generate healthy cash flows. The company has recorded revenue growth for four consecutive quarters, while earnings have improved for three straight quarters.
Caterpillar’s order backlog reached a record $72 billion at the end of second-quarter 2026, up 92% year over year. All three primary segments contributed to the growth, with approximately 59% of the backlog expected to be delivered over the following 12 months. The substantial backlog improves revenue visibility and supports future cash flow.
Encouraged by solid demand and improving business conditions, management raised its full-year 2026 sales and revenue growth outlook to the mid-to-high teens from the previously projected low-double-digit growth. The upward revision reflects stronger sales to end users, healthy order rates and expectations of increased production throughput in the second half of the year.
Caterpillar is also positioned to benefit from infrastructure development, construction activity, commodity demand and rising investments in energy transition and data centers. Its expanding aftermarket services business, which typically generates attractive margins, provides an additional source of recurring revenues and cash flows.
How Do CAT's Peers Compare on Dividends?
Terex Corporation (TEX - Free Report) currently pays a quarterly dividend of 17 cents per share, with a payout ratio of 14%. Terex increased its dividend three times in the past five years. Terex’s last increase occurred in 2023, when it raised the payout by 15% in February and another 13% in July, bringing the quarterly dividend to 17 cents. Terex's dividend has grown at an annualized rate of 7.4% over the past five years.
Komatsu (KMTUY - Free Report) has an annualized five-year dividend growth of 13.7%. Komatsu raised its dividend four times in the past five years. Komatsu's dividend payout ratio is about 33%, and it pays an annual dividend of 89 cents per share.
Deere & Company (DE - Free Report) currently pays a quarterly dividend of $1.62 per share, with a payout ratio of 36%. Deere has increased its dividend six times in the past five years. Deere’s dividend has grown at an annualized rate of 11.55% over the past five years.
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CAT Keeps Dividend Unchanged: Is Another Hike on the Horizon?
Key Takeaways
Caterpillar Inc. (CAT - Free Report) continues to demonstrate its commitment to shareholder returns, supported by consistent dividend payments, robust cash flow generation and improving business momentum. The company maintained its quarterly dividend at $1.63 per share, with the next payout scheduled for Nov. 19, 2026.
Caterpillar last increased its quarterly dividend by 8% to $1.63 per share, marking its sixth consecutive year of high-single-digit dividend growth. The company has increased its annual dividend for 33 consecutive years and has been a member of the S&P 500 Dividend Aristocrats Index since 2019. CAT has paid cash dividends every year since its inception, with uninterrupted quarterly payments dating back to 1933.
Over the past five years, Caterpillar has increased its dividend at an annualized rate of 8.10%, reflecting its commitment to rewarding shareholders. The company's dividend payout ratio of 25.36% is slightly above the industry average of 25.31%. CAT’s current dividend-to-free-cash-flow ratio stands at 0.30, reflecting a healthy and sustainable dividend profile.
CAT's Robust Cash Flow Supports Shareholder Returns
Caterpillar's healthy cash position and disciplined capital allocation strategy strengthen its ability to sustain dividend growth. In 2025, the company spent $5.2 billion on share repurchases and $2.7 billion on dividends. In the first half of 2026, CAT returned a combined $7.9 billion to shareholders through dividends and share repurchases.
The company exited second-quarter 2026 with $6.7 billion in enterprise cash and an additional $1.5 billion in liquid marketable securities, providing ample financial flexibility.
Management raised its full-year 2026 Machinery, Power & Energy (MP&E) free cash flow outlook to the upper half of its annual target range of $6-$15 billion. Capital expenditure expectations remained unchanged at approximately $3.5 billion. Caterpillar also reiterated its commitment to returning all MP&E free cash flow to shareholders substantially over time
Improving Business Momentum Strengthens CAT's Dividend Prospects
Caterpillar's improving operating performance further supports its ability to generate healthy cash flows. The company has recorded revenue growth for four consecutive quarters, while earnings have improved for three straight quarters.
Caterpillar’s order backlog reached a record $72 billion at the end of second-quarter 2026, up 92% year over year. All three primary segments contributed to the growth, with approximately 59% of the backlog expected to be delivered over the following 12 months. The substantial backlog improves revenue visibility and supports future cash flow.
Encouraged by solid demand and improving business conditions, management raised its full-year 2026 sales and revenue growth outlook to the mid-to-high teens from the previously projected low-double-digit growth. The upward revision reflects stronger sales to end users, healthy order rates and expectations of increased production throughput in the second half of the year.
Caterpillar is also positioned to benefit from infrastructure development, construction activity, commodity demand and rising investments in energy transition and data centers. Its expanding aftermarket services business, which typically generates attractive margins, provides an additional source of recurring revenues and cash flows.
How Do CAT's Peers Compare on Dividends?
Terex Corporation (TEX - Free Report) currently pays a quarterly dividend of 17 cents per share, with a payout ratio of 14%. Terex increased its dividend three times in the past five years. Terex’s last increase occurred in 2023, when it raised the payout by 15% in February and another 13% in July, bringing the quarterly dividend to 17 cents. Terex's dividend has grown at an annualized rate of 7.4% over the past five years.
Komatsu (KMTUY - Free Report) has an annualized five-year dividend growth of 13.7%. Komatsu raised its dividend four times in the past five years. Komatsu's dividend payout ratio is about 33%, and it pays an annual dividend of 89 cents per share.
Deere & Company (DE - Free Report) currently pays a quarterly dividend of $1.62 per share, with a payout ratio of 36%. Deere has increased its dividend six times in the past five years. Deere’s dividend has grown at an annualized rate of 11.55% over the past five years.