Caterpillar (CAT) is the leader in construction equipment manufacturing.  The company has a market cap of $56 billion, significantly higher than rival Deere & Company (DE) which has a market cap of $32 billion.  Caterpillar is not only a member of the Dow Jones Index, the company is also a member of theDividend Achievers Index.  Dividend Achievers are stocks that have increased their dividend payments for 10 or more consecutive years.

Caterpillar has been paying dividends since 1925.  The company has not reduced its dividend payments since 1982, giving it 32 consecutive years of dividend payments without a reduction and qualifying it for potential investment using The 8 Rules of Dividend investing.  This article will analyze Caterpillar for dividend growth investors.

Business Overview & Current Events

Caterpillar divides its operations into 5 primary segments:  Construction Industries, Resource Industries, Energy & Transportation, Other, and Financial Products.  Each segment's percentage of total operating profit contributed to Caterpillar in its most recent quarter is shown below to illustrate the relative importance of each segment to the company as a whole:

Energy & Transportation

The Energy & Transportation segment carried Caterpillar's results in its third quarter 2014.  The segment saw sales increase by 13% and operating income by 29% versus the same period a year ago.  The company saw a rise in transportation orders as the rail industry is readying itself for changing emissions guidelines starting in 2015 in the US.  Oil & gas sales increased in the quarter due to rising North American sales.  North American oil & gas sales will likely decline over the next several quarters as the low cost of oil reduces investment  in oil & gas equipment.