Caterpillar's dividend grows for 32 years, backed by strong cash flow and manageable debt despite tariff challenges.

Caterpillar posted record revenues of $67.6 billion in FY2025 and maintains a strong dividend track record with 32 consecutive years of increases, most recently raising its quarterly dividend to $1.51. The company’s dividend payout ratios are conservative, supported by robust free cash flow and earnings, with a free cash flow payout ratio of 26.8% and an earnings payout ratio of 32%. Despite rising debt and tariff-related costs projected at $2.6 billion in 2026, Caterpillar’s interest coverage remains strong at 10.9x, and it holds nearly $10 billion in cash. Management emphasizes a firm commitment to returning free cash flow to shareholders, making the dividend safe and likely to continue growing, barring unexpected tariff escalations or a downturn in the construction cycle.