Wednesday, September 16, 2015

Stock Report: Caterpillar (CAT)

 Caterpillar is well-known in the dividend growth community. I've had CAT on my buy list for a while. I have two concerns: in recent years they've grown dividends at or near double digits. I'm not sure how they can sustain that in the current environment. The stock's been in decline like the rest of the market and a weaker China can pose growth challenges for CAT. But then again they've been doing this for a long time, and are committed to dividends.
The other mark on their record is that they didn't raise dividends in 2009. They kept paying, and didn't cut. This means that in tougher times that may happen again, and makes them not as reliable for growth as some other companies.
A stronger dollar may depress international earnings, but the stronger US economy can offset some of that. I'm looking to add CAT to my portfolio soon. This will be a new position.

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