CAT vs DE: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
DE yields 0.29% more than CAT. In dollar terms, CAT pays $6.04/share vs DE's $6.48/share annually.
Dividend Growth
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: The payout ratio of 31% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x.
DE: The payout ratio of 35% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.9x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in CAT vs DE today?
At $776.53 per share, $10,000 buys about 12.9 shares of Caterpillar Inc (CAT). Each share pays $6.04 per year in dividends, so the position starts out generating roughly $78 per year — about $6 a month.
At $606.06 per share, $10,000 buys about 16.5 shares of Deere & Co (DE). Each share pays $6.48 per year in dividends, so the position starts out generating roughly $107 per year — about $9 a month.
DE is the larger income stream from day one: $29 per year more on the same $10,000 invested.
What could $10,000 of CAT or DE income look like in 10 years?
Caterpillar Inc (CAT) has raised its dividend about 15.8% a year over the past five years. If that pace held, the $80 per year that $10,000 generates today at the current 0.80% yield would reach $346 per year by 2036 — a 3.5% yield on the original cost.
Deere & Co (DE) has raised its dividend about 13.5% a year over the past five years. If that pace held, the $109 per year that $10,000 generates today at the current 1.09% yield would reach $388 per year by 2036 — a 3.9% yield on the original cost.
On those trailing rates, DE pays more in 2036: $388 versus $346 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would CAT's dividend growth overtake DE's higher yield?
Caterpillar Inc (CAT) yields less today (0.80% vs 1.09%) but has grown its dividend faster — 15.8% vs 13.5% a year over the past five years. If both trends continued, a $10,000 position in CAT would start out-earning the same position in DE around 2042 (roughly 16 years from now), paying about $834 per year at the crossover. Before that point, DE pays more each year; after it, the gap compounds in CAT's favor.
Can CAT and DE afford their dividends?
Caterpillar Inc (CAT) earns $18.81 per share against $6.04 paid out in dividends — 3.1x coverage (a 31% payout ratio).
Deere & Co (DE) earns $18.51 per share against $6.48 paid out in dividends — 2.9x coverage (a 35% payout ratio).
Coverage is similar for both, so neither dividend looks meaningfully more stretched than the other on current earnings.
Which fits an early-retirement income portfolio better, CAT or DE?
For income you need right now, Deere & Co (DE) leads: $100,000 invested today pays about $91 a month at the current 1.09% yield, versus $67 a month from Caterpillar Inc (CAT) at 0.80%.
With a decade or more before the income is needed, CAT's faster dividend growth (15.8% vs 13.5% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: DE has raised its dividend 5 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $375/yr in CAT vs $433/yr in DE by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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