Caterpillar news today has CAT stock falling lower, despite it increasing its dividend.

The update from Caterpillar (NYSE:CAT) to its investors today includes a dividend increase. This has the company raising its quarterly dividend by 20% to $1.03 per share. This higher dividend will be payable Aug. 20, 2019 to shareholders on record as of July 22, 2019. However, this doesn’t look to have holders of CAT stock excited today.

Here’s what company Chairman and CEO Jim Umpleby has to say about the dividend increase.

“Through the execution of our strategy, Caterpillar is now a stronger and more profitable company that can produce higher free cash flow through the cycles. We plan to return substantially all ME&T free cash flow to shareholders through dividend increases and more consistent share repurchases to create more long-term value for shareholders.”

This sounds like it is good news for holders of CAT stock. So why is this Caterpillar news having the opposite effect? That may have to do with this not being what investors were expecting from the company.

Jefferies analyst Stephen Volkmann weighs in on the Caterpillar news by noting that it is more evolutionary than revolutionary, which may be a disappointment to some CAT stock investors. He also notes that some investors were hoping for a large one-time repurchase of shares, but that isn’t the case. These two factors could be part of what is weighing down CAT stock on Thursday.

CAT stock was down 2% as of Thursday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.