Caterpillar (CAT) will raise its quarterly dividend by 7.8 percent to $1.11 per share in 2021. This follows a dividend hike of 19.8 percent to $1.03 per share announced in 2019. The heavy equipment maker has now raised its annual dividend for the 28th consecutive calendar year.

The next dividend is payable August 20, 2021, to shareholders of record at the close of business on July 20, 2021. A new annualized rate of $4.44 per share yields 2.0% at a stock price of $212.

"Through the execution of our enterprise strategy for profitable growth, Caterpillar is generating higher free cash flow through the cycles," said Caterpillar CEO Jim Umpleby. "Our strong balance sheet and liquidity position make it possible for us to continue our long history of increasing our dividend and returning value to shareholders."

Caterpillar has paid a cash dividend every year since the company was formed and has paid a quarterly dividend since 1933. The company has paid higher dividends to shareholders for 27 consecutive years and is a member of the S&P 500 Dividend Aristocrat Index.

Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments - Construction Industries, Resource Industries and Energy & Transportation - and also provides financing and related services through its Financial Products segment. Caterpillar has paid a cash dividend every year since the company was formed and has paid a quarterly dividend since 1933.