Caterpillar Inc (NYSE:CAT, ETR:CAT1) hiked its dividend $0.11 and its share buyback by a slightly larger $20 billion.
The construction and mining equipment maker said that under its current authorization, up to $21.8 billion of its shares can be bought back.
Directors of the Texas-based group voted to up the quarterly dividend by 8% to $1.41 per share, payable August 20.
Caterpillar said it expects to continue to "return substantially" all free cash flow from machinery, energy & transportation (ME&T) over time through dividends and share repurchases, it said in a statement.
“We continue to generate robust ME&T free cash flow through the execution of our enterprise strategy for long-term profitable growth,” said Chairman and CEO Jim Umpleby.
“Our strong financial performance supports increasing our quarterly dividend and share repurchase authorization, which aligns with our commitment to return substantially all ME&T free cash flow to shareholders over time.”
Caterpillar has paid a cash dividend ever since it was formed, with higher annual dividends for 30 consecutive years.