Caterpillar Stock Looks Like a Viable Option for Dividend Investors

The key conclusion to be drawn from Caterpillar's (NYSE: CAT) third-quarter report probably isn't what most investors thought it would be before it was released.

It doesn't relate to the company's sales and earnings momentum, nor to the near-term guidance -- both are challenged. Instead, the No. 1 takeaway should be that interest rates and stock valuations still matter. Simply put, Caterpillar's earnings outlook isn't good, but if management's projections are correct, then it's good enough to suggest buying the stock. Here's why.

Despite being a company with highly cyclical earnings, Caterpillar is a Dividend Aristocrat, and currently yields around 3.1%. At this point, it's worth noting that since 2011, there has only been a brief period (at the end of 2018) when the yield on the 10-year Treasury exceeded Caterpillar's current dividend yield.

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Source Fool.com