By Davit Kirakosyan

Caterpillar Inc. (NYSE) shares closed over 1% higher than the broad market, but the wider market lost about 1% when the company’s Board of Directors announced that it would increase its quarterly cash dividend by 88% to $1.20 for common stock. Dividends are payable to all shareholders on August 19 for those who have been registered as of the closing of business July 20. July 19 will be the ex-dividend day.

The increase this year was approximately in line with the 7.8% dividend rise last year.

“Our dividend increase reflects our strong balance sheet and liquidity position as well as confidence in continued strong free cash flow generation from Machinery, Energy & Transportation (ME&T),” said Caterpillar Chairman and CEO Jim Umpleby. “We intend to return substantially all ME&T free cash flow to shareholders over time through dividends and share repurchases.”

Caterpillar, which has been paying higher dividends annually to shareholders over 28 consecutive years for the Dividend Aristocrat Index, is proud to be a member.

The new dividend yields 2.1% per year based on closing prices