According to CNBC, the Enhanced Dividend Income Portfolio added to its Caterpillar position at $581 last week, after the stock fell 11% over the two days following the election. The purchase price was about 46% below the company’s June 30 record high. The portfolio’s managers said concerns about delays in data-center development could affect demand and delivery timing, but viewed the decline as an opportunity to add to the diversified business.
Caterpillar’s third-quarter revenue rose 17% to $20.7 billion, while adjusted earnings per share increased about 45% to $7.20. Power-generation sales grew 30%, and its Machinery, Power and Energy businesses generated $3.8 billion in free cash flow. Construction, mining and energy also grew last quarter.
Caterpillar raised its dividend 8% this year, marking its 32nd consecutive year of increases. Its price-to-earnings ratio was 23.5, below its 10-year average of 28. The portfolio’s managers cited dividend growth, cash generation and potential long-term total return as reasons for their investment.