Caterpillar Inc. said Wednesday that its board of directors has voted to raise the company's quarterly dividend by 5 percent, as the world's largest maker of construction and mining equipment continues to benefit from the global economic recovery.
The announcement comes ahead of the company's annual meeting Wednesday afternoon. Caterpillar said the dividend hike reflects improvement in the company's balance sheet and cash flow in 2009, as the U.S. and other nations pulled out of the economic recession.
The increase lifts Caterpillar's quarterly payout by 2 cents to 44 cents. It will be payable Aug. 20 to shareholders of record at the close of business July 20.
In April, the company posted first-quarter net income of $233 million, reversing a year-ago loss, and said it was ramping up production to meet burgeoning demand for its heavy equipment, especially in commodity-rich developing countries. Caterpillar's iconic yellow-and-black machinery is sold in so many places and used by so many industries that its results are considered an indicator of the economy's overall health.
On Tuesday, the Peoria, Ill., company said its long-term profit goals won't change when company veteran Doug Oberhelman takes over as CEO in July, backing its forecast for annual earnings per share growth of 15 to 20 percent.
Shares of Caterpillar rose $1.53, or 2.7 percent, to $58.14 in afternoon trading. Shares of other construction equipment makers such as Deere & Co. also climbed, as the broader markets were spurred by encouraging comments from Federal Reserve Chairman Ben Bernanke about the likely small impact that European debt problems might have on U.S. economic growth.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.