(Bloomberg) -- Caterpillar Inc (NYSE:CAT). is sharing the wealth with investors, announcing a 20 percent increase in its quarterly dividend that takes it to a record.
The heavy-equipment maker expects to increase the dividend in each of the following four years by “at least a high single-digit percentage.” With its remaining free cash flow, the company intends to repurchase shares “on a more consistent basis,” it said in a statement Thursday.
Key Insights
- In the first quarter, the Deerfield, Illinois-based manufacturer reported profit and sales that beat estimates, driven by a boost from mining orders.
- The company had $7.1 billion in cash at the end of the first quarter after buying back $751 million of its common shares and paying dividends of $494 million.
- CFO Andrew Bonfield has said sales could rise more “rapidly” this year as mining companies boost capital spending and replace aging equipment. Dealers inventories in the resource industries have fallen.
- The world’s largest construction and mining equipment maker is considered a bellwether for economic growth. That makes its shares particularly vulnerable to trade tensions and fears of a global slowdown.
Market Reaction
- The statement was released before the start of regular trading in New York, where Caterpillar shares climbed 0.8 percent.
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