Caterpillar dividend: cash coverage and yield
Caterpillar's dividend starts at a quarterly rate of $1.63, with the base path giving $6.64, $7.12 and $7.68 per share. Caterpillar's 2025 real free cash flow was $9,242 million, while Caterpillar distributed about $7.9 billion through dividends and repurchases, so cash covered those distributions.
How much does Caterpillar pay per share?
Dividends start from a quarterly rate of $1.63. The base path gives $6.64, $7.12 and $7.68 per share, while the bear holds at $6.52 and the bull reaches $8.08 by 2029. The base continues the company’s roughly 8% annual increases; the bear assumes a pause because expansion competes for cash. Caterpillar has raised its annual dividend for 32 consecutive years, supporting stability but not guaranteeing growth.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Normal operating profit | 14,022 (11,400 / 15,470) | 14,964 (12,012 / 17,019) | 16,008 (12,792 / 19,190) |
| Shares (millions) | 452 (453 / 450) | 444 (447 / 440) | 435 (442 / 431) |
| Dividends per share | 6.64 (6.52 / 6.68) | 7.12 (6.52 / 7.34) | 7.68 (6.52 / 8.08) |
Is Caterpillar's dividend covered by its cash?
MP&E means Machinery, Power & Energy, excluding Financial Products. In 2025, MP&E operating cash flow was $12,278 million and capital spending was $2,794 million, leaving $9,484 million of free cash flow under the company’s definition. Cash generation held up even as earnings weakened, and Caterpillar distributed about $7.9 billion through dividends and repurchases.
Free cash flow has other complications. Caterpillar’s 2022 reported figure included $717 million of tax-settlement payments that actually left the company. Stock compensation offers another analytical adjustment: subtracting it produced “real” free cash flow of $9,242 million in 2025. Capital spending also combines replacement and expansion, and Caterpillar does not disclose a clean maintenance figure.
| Year to Dec 2025 | Year to Dec 2024 | Year to Dec 2023 | Year to Dec 2022 | Year to Dec 2021 | |
|---|---|---|---|---|---|
| Real free cash flow (after stock pay) (calculated) | 9,242 | 9,226 | 9,817 | 4,867 | 5,848 |
| Dividends paid | 2,749 | 2,646 | 2,563 | 2,440 | 2,332 |
| Shares bought back | 5,190 | 7,697 | 4,975 | 4,230 | 2,668 |
| New shares sold | 82 | 113 | 98 | 123 | 212 |
| Returned to shareholders, share of real free cash flow (calculated) | 85.9% | 112.1% | 76.8% | 137.0% | 85.5% |
What could change Caterpillar's dividend?
The bear view would gain weight in late 2026 and 2027 if dealer inventory falls faster than end-user demand, factory utilization weakens or supplier constraints delay profitable power deliveries. Slower cash generation would also limit repurchases.
What is Caterpillar's dividend yield today?
Industrial cash flow is the cleaner valuation test. The stated consolidated free-cash-flow yield is 2.6%, but group cash flow mixes factories with lending. Caterpillar expected 2026 industrial free cash flow in the top half of its $6 billion–$15 billion target range, or roughly $10.5 billion–$15 billion. Against today’s market value, that is about 2.9%–4.1%. The dividend yield is only 0.8%, so much of the investment case depends on future cash and repurchases.
| Today (Oct 9, 2026) | |
|---|---|
| Share price | 796.18 |
| Free cash flow yield (calculated) | 2.6% |
| Dividend yield (calculated) | 0.8% |