As the world’s largest producer of heavy equipment, Caterpillar is in a unique position as both market leader and industry bellwether. CAT announced strong third-quarter earnings on Monday, posting EPS up almost 50% from second quarter, with sales up 9% in North America and 8% in Asia on a quarter-over-quarter basis. Sounds great, right?
Well, yes. But Caterpillar also announced lowered guidance for the year and almost into 2015. The company is looking at much slower growth based on a global economic expansion rate of 2.5%. So, while the stock rose a tad after a quick drop, it’s still trading well below it’s 52-week high.
Here’s the good news: CAT pays a dividend of 52 cents per quarter with a 2.44% dividend yield, on a stock trading at a measly 8x trailing earnings. CAT has paid a dividend since 1914, and despite the current slowdown, that history should continue.