Jim Cramer’s 5 Favorite Dividend Aristocrats

4. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 45

Dividend Yield as of September 12: 2.63%

Jim Cramer is bullish on Caterpillar Inc. (NYSE:CAT) and noted that the stock is undervalued. As of September 12, Caterpillar Inc. (NYSE:CAT) has a trailing twelve-month PE ratio of 15.4 and is offering a forward dividend yield of 2.63%, which the company supports with free cash flows of more than $3 billion.

On August 2, Caterpillar Inc. (NYSE:CAT) announced earnings for the second quarter of fiscal 2022. The company reported earnings per share of $3.18 and beat EPS estimates by $0.16. The company’s revenue for the quarter amounted to $14.25 billion, up 10.5% year over year.

On August 31, Baird analyst Mircea Dobre reiterated his buy-side Outperform rating and $224 price target on Caterpillar Inc. (NYSE:CAT).

At the close of Q2 2022, 45 hedge funds held stakes in Caterpillar Inc. (NYSE:CAT) worth 3.25 billion. Of those, Fisher Asset Management was the leading shareholder with stakes of roughly $1.34 billion. The investment covers 0.94% of Ken Fisher’s 13F portfolio.

Here is what Diamond Hill Capital had to say about Caterpillar Inc. (NYSE:CAT) in its first-quarter 2022 investor letter:

“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”