Caterpillar (NYSE:) increased its quarterly dividend by ten cents, an increase of 8%, to $1.30 per share, effective August 18, 2023.
In addition, Caterpillar has increased its share buyback authorization by $20 billion.
CAT shares rose 1% in Wednesday trading after the announcements.
With the expanded authorization, Caterpillar now has the capacity to repurchase up to $21.8 billion of common stock.
“We continue to generate robust ME&T free cash flow by executing our business strategy for long-term profitable growth,” said Jim Umpleby, chairman and CEO of Caterpillar.
“Our strong financial performance supports the increase in our quarterly dividend and share repurchase authorization, which is consistent with our commitment to returning substantially all free ME&T cash flow to shareholders over time.”
Caterpillar has a long history of paying dividends. Caterpillar has paid a cash dividend every year since its founding and has paid quarterly dividends since 1933. This marks the 29th consecutive year of higher annual dividends for the company.
