Saturday, December 29, 2012

Caterpillar accelerates dividend

As I was compiling some dividend history for my positions to try and get and weighted average growth rate over the past few years, I noticed that Caterpillar (CAT) was scheduled for 5 payments this year.  Since other companies have gone the route of accelerating their dividend to pay this year I had to double check this on Caterpillar's investor relations website. 

And sure enough, the board of directors has chosen to accelerate the dividend to pay out on December 31st to shareholders of record as of December 24th.  Sorry for not getting this information out earlier but I just found it myself.  This is the farthest that I've seen a company accelerating their dividend since Caterpillar's first payout of the year is usually in mid-February.  The board estimates that paying in December 2012 will save their shareholders approximately $30 million in taxes should tax rates increase when 2013 rolls around.  I wasn't expecting or really hoping for this but I'll take the chance to continue compounding my Caterpillar dividends.  This is potentially bad news for anyone thinking of investing in Caterpillar because by accelerating the dividend you will now have to wait 5.5 months for their next payout.  I don't feel Caterpillar represents great value here but with the fiscal cliff negotiations pretty much at a standstill a great entry price could be just a few days away.

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