CAT vs DE: Dividend Yield, Growth & Safety Comparison
Caterpillar Inc (CAT) and Deere & Co (DE) are both in the Industrials sector, making them natural rivals for dividend investors. Both stocks offer similar yields — CAT at 0.80% and DE at 1.09%. For dividend growth, CAT leads with a 5-year CAGR of 15.8% versus DE's 13.5%. Both stocks carry a "Safe" dividend safety rating. DE is a Dividend Challenger with 5 years of consecutive increases.
Key Metrics Comparison
| Metric | CAT | DE |
|---|
| Dividend Yield | 0.80% | 1.09% |
| Annual Dividend | $6.04 | $6.48 |
| 5-Year CAGR | 15.8% | 13.5% |
| Payout Ratio | 31% | 35% |
| Consecutive Years | 0 | 5 |
| Price | $776.53 | $606.06 |
Yield Comparison
Deere & Co (DE) currently yields 1.09%, which is modest for the broader market. That's 0.29% more than Caterpillar Inc (CAT), which yields 0.80%. In dollar terms, DE pays $6.48/share annually versus CAT's $6.04/share.
Dividend Growth
Over the past five years, CAT has grown its dividend at a 15.8% CAGR compared to DE's 13.5%. CAT: Dividend growth is accelerating — the 3-year CAGR of 24.0% exceeds the 5-year rate of 15.8% and the 10-year rate of 10.9%. DE: Dividend growth is slowing — the 3-year CAGR of 10.4% trails the 5-year rate of 13.5% and the 10-year rate of 11.7%.
Dividend Safety
CAT's dividend safety is rated "Safe." The payout ratio of 31% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x. DE's dividend safety is rated "Safe." The payout ratio of 35% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.9x. Both have similar payout ratios — CAT at 31% and DE at 35%.
Income Comparison
A $10,000 investment in DE generates approximately $109/year in dividend income, compared to $80/year from CAT — a difference of $29/year. At $100,000, that gap widens to $290/year.
Verdict
- Best for income: DE
- Best for growth: CAT
- Best for safety: CAT
Frequently Asked Questions
Which has a higher dividend yield, CAT or DE?
Deere & Co (DE) has a higher dividend yield of 1.09% compared to Caterpillar Inc (CAT) at 0.80%.
Is CAT or DE a better dividend growth stock?
Caterpillar Inc has the stronger dividend growth with a 5-year CAGR of 15.8%, compared to Deere & Co's 13.5%.
Which is safer for dividend income, CAT or DE?
Caterpillar Inc's dividend safety is rated "Safe" while Deere & Co is rated "Safe." The payout ratio of 31% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x. The payout ratio of 35% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.9x.
How much income does $10,000 in CAT vs DE generate?
A $10,000 investment in CAT generates approximately $80/year in dividends, while the same amount in DE generates about $109/year.
Is CAT or DE a Dividend Aristocrat?
Deere & Co is a Dividend Challenger with 5 consecutive years of increases. Caterpillar Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, CAT or DE?
Caterpillar Inc has a lower payout ratio of 31% compared to Deere & Co's 35%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
CAT vs DE: which is better for retirement income?
It depends on your priorities. DE for current income, CAT for dividend growth, CAT for safety. Many retirement investors hold both for diversification.
CAT Dividend Analysis | DE Dividend Analysis | All Comparisons | Comparison Tool