Why Caterpillar (CAT) Remains a Heavyweight Among NYSE Dividend Stocks
Caterpillar Inc. (NYSE:CAT) is included among the 10 Best NYSE Dividend Stocks to Buy.
Photo by Dan Dennis on Unsplash
Caterpillar Inc. (NYSE:CAT), the world’s largest maker of construction equipment, is a classic example of a cyclical stock. Its performance closely follows the state of the economy, thriving during periods of growth but taking sharp hits during downturns. As a result, the company’s long-term revenue pattern resembles a roller coaster rather than a steady climb.
To soften the impact of these economic swings, Caterpillar Inc. (NYSE:CAT) has been working to expand its services business, which provides more consistent recurring revenue. Another major opportunity lies in the rapid expansion of data centers fueled by artificial intelligence and cloud computing. Goldman Sachs Research projects that global electricity demand from data centers could rise by as much as 165% by 2030, creating heavy pressure on the power grid. Caterpillar is well-positioned to benefit from this trend through its power generation and energy storage solutions, which can help meet the soaring energy needs of data centers until grid infrastructure catches up.
In addition, Caterpillar Inc. (NYSE:CAT) is a strong dividend company. The company’s quarterly dividend stands at $1.51 per share and has a dividend yield of 1.29%, as of September 20. CAT has been growing its payouts for 31 consecutive years.
While we acknowledge the potential of CAT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 12 Best Dividend Paying Stocks to Buy Now and 13 Incredibly Cheap Dividend Stocks to Invest In.
Disclosure: None.
Content Original Link:
" target="_blank">
