Jim Cramer’s 5 Favorite Dividend Aristocrats

4. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 43

Dividend Yield as of December 16: 2.08%

Caterpillar Inc. (NYSE:CAT) is an Illinois-based company that manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. Jim Cramer, on August 30, told his viewers that Caterpillar Inc. (NYSE:CAT) shares have rebounded from their July lows, but they aren’t near their April highs. He explained further:

“CAT should get a huge boost from recent legislation, and with the stock down at 15 times earnings, I’m betting Wall Street’s gotten too negative on Caterpillar.”

On December 14, Cramer reinforced his support for Caterpillar, calling it an undervalued stock that investors are ignoring. He also said that he does not discount industrial stocks in 2023, and neither does he expect next year to bring a bear market. 

Caterpillar Inc. (NYSE:CAT) on December 15 declared a $1.20 per share quarterly dividend, in line with previous. The dividend is distributable on February 17, 2023 to shareholders of record on January 20. Caterpillar Inc. (NYSE:CAT) has paid increasing annual dividends to shareholders for 29 consecutive years. 

According to Insider Monkey’s data, 43 hedge funds were long Caterpillar Inc. (NYSE:CAT) at the end of Q3 2022, compared to 45 funds in the earlier quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with 7.35 million shares worth $1.20 billion. 

In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Caterpillar Inc. (NYSE:CAT) was one of them. Here is what the fund said:

“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.”