Uncontrollable macro factors have worked against Caterpillar (CAT - Get Report) over the past three years, causing the stock to significantly underperform the market. While the business is cyclical, the company's hefty cash pile on hand, consistent free cash flow generation, and moderate payout ratios create strong cushion for the dividend and appear to offer double-digit dividend growth potential when its markets eventually rebound.
Timing the bottom of the current down cycle is impossible, but the stock's 4.4% dividend yield (higher than 73% of all other dividend stocks in the market) and reasonable forward price-to-earnings multiple of 14.5 indicate the stock's relative attractiveness for very long-term focused dividend investors. The reasons for Caterpillar's success over its 85+ years of being in business continue to hold true today with its dealer network, and the company is quickly integrating new technologies that will widen its moat. For these reasons, we believe Caterpillar offers compelling total return potential over the next few years and include the company in our Top 20 Dividend Stocks list.
Source: The Street
Related Articles:
- Searching the World For The Best Dividend Stocks
- What's Your Retirement Vision?
- Stock Dividends - The Gift of Nothing
- What's More Powerful Than Compound Interest?
- Dividends vs. Stock Buybacks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Real value comes from holding on to your stocks for years -- decades is best -- and watching as their businesses grow and appreciate. It'...
-
In this article we discuss the 5 Best Dividend Stocks to Buy According to Billionaire Ken Fisher. 5.) British American Tobacco p.l.c. (NYSE:...
-
Investing for retirement requires a different approach from merely betting on growth or value stocks. The strategy for fixed-income is to bu...
-
On Monday, AT&T (NYSE:T) confirmed that it will spin off its WarnerMedia entertainment unit and merge it with Discovery. While this will...
-
High dividend stocks included on our list had a number of criteria to meet — all stocks satisfied a minimum dividend yield requirement, have...
-
Earlier generations have favored dividend investing because generally higher yields were on offer then. Today, though, some investors have b...
-
One of our favorite areas to find blue-chip dividend stocks is in the utility sector. Companies in this space provide electricity, gas and w...
-
It’s safe to say that one of the biggest concerns that economists and investors have on their minds at this time is inflation. Regardless of...
-
Business Development Companies, known as BDCs, offer the retail investor exposure to privately-held firms, which often are funded by venture...
-
One factor that can make a big difference is competitive advantage and leadership in a given industry. In general, larger companies with glo...
Howdy,
Caterpillar is truly one fine company. I'm concidering buying in at these levels below $70. They are surely alive and kicking 50 years from now, still rising dividends.
Best regards petrusko