Benzinga - Shares of Caterpillar Inc (NYSE:CAT) thundered into Tuesday's trading session with a potent quarterly report, setting off an 8% rally that saw the stock reach an all-time high of over $287.
By The Numbers: The industrial heavyweight posted earnings of $5.55 per share, ahead of the $4.58 Street estimate, on revenues of $17.32 billion, ahead of the $16.49 billion consensus estimate. Read more on the earnings print here.
Caterpillar’s backlog swelled to $30.7 billion — a $300 million gain over the last quarter and a $2.2 billion increase year-over-year.
The good news of share appreciation doesn’t stop there. For those with an eye on dividends, the company is extending a welcoming hand to income investors.
Caterpillar currently has a 1.82% dividend yield. If you’re wondering what kind of investment yields a decent $500 per month, let’s break down the numbers.
An investment of roughly $329,670, or 1,150 shares in Caterpillar would give you a $500 dividend payout each month. If you’re looking to start with a more modest income stream, an investment of around $65,934, or 230 shares, translates to an extra $100 per month.
Dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.
If a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).
Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).
Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.
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