11 Undervalued Dividend Aristocrats to Buy Now

7. Caterpillar Inc. (NYSE:CAT)

Forward P/E Ratio as of May 7: 16.56

Caterpillar Inc. (NYSE:CAT) ranks seventh on our list of the best dividend aristocrat stocks. The Texas-based manufacturing company is known for producing construction and mining equipment, along with off-highway diesel and natural gas engines and gas turbines. The company operates across all continents through its extensive global dealer network. Over time, it has broadened its range of offerings. It has licensed its brand for a line of apparel and footwear, and it also offers financial services through its subsidiary, Cat Financial.

Caterpillar Inc. (NYSE:CAT) reported mixed earnings in the first quarter of 2025, with revenue of $14.2 billion, which fell by nearly 10% from the same period last year. The decline was mainly attributed to a $1.1 billion drop in sales volume and a negative pricing impact of $250 million. The lower sales volume was largely influenced by shifts in dealer inventory levels. Operating profit margin stood at 18.1% in the first quarter of 2025, down from 22.3% in the same period of 2024.

Though Caterpillar Inc. (NYSE:CAT)  suffered losses on various fronts, the company’s cash position still remained stable. Its enterprise cash flow for the quarter came in at $1.3 billion, and its enterprise cash amounted to $3.6 billion. The company remained committed to its shareholder obligation, returning $3.7 billion to investors through dividends and share repurchases. It currently pays a quarterly dividend of $1.41 per share and has a dividend yield of 1.74%, as of May 7. The company’s dividend growth streak spans 30 years.