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Cat YTD stock performance tops DJIA through first three quarters

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Despite a gloomy year to date, Caterpillar Inc. has been the best performer of the 30 stocks making up the Dow Jones Industrial Average through the first three quarters of 2016, according to Wall Street experts.

And it appears headed toward a strong fourth quarter, as well; at least in regards to its stock performance.

Cat stock reached a 52-week high four out of the last five days. On Wednesday it hit the current 52-week high at $89.87 a share before settling back to $89.42 at the close of trading on the New York Stock Exchange.

At the start of 2016, Caterpillar stock was trading at about $56 a share.

Paul Ausick of 24/7 Wall Street reported Wednesday that Cat’s stock value has risen 30.62 percent through the first nine months of 2016, outperforming the other DJIA stocks. The index itself is up 5.06 percent through the third quarter of the year.

Ausick wrote that Caterpillar’s performance is likely because of three factors: It’s dividend yield, which at 3.52 percent as of last Friday trails only Verizon and Chevron among the Dow 30; the fact the company has been cutting costs throughout the year to bring them in line with demand; and there has been an increase in demand for gold and other metals that are mined with Caterpillar machines.

Also helping is the fact that despite sales and revenues being below last year in almost every category, the company is still making a profit. It hasn’t posted a loss in any quarter for several years, thanks almost solely to the restructuring.

Caterpillar will next declare a quarterly dividend later in October and it is scheduled to release its third quarter financials on Oct. 25. In its most recent outlook, the company said it expected full-year sales and revenues to be down to about $40 billion and profits to be about $2.75 a share. At the start of the year the company forecast a 2016 profit of $3.50 a share, but that was before it took on more restructuring than originally planned.

About the Author
Paul Gordon is the editor of The Peorian after spending 29 years of indentured servitude at the Peoria Journal Star. He’s an award-winning writer, raconteur and song-and-dance man. He also went to a high school whose team name is the Alices (that’s Vincennes Lincoln High School in Indiana; you can look it up).