Caterpillar (NYSE:CAT) is a company that designs and manufactures heavy machinery, particularly for construction and farming. One does not automatically associate Caterpillar with the defense industry, but it has a long history of building defense machinery. The company itself was established in 1925 and is now based out of Irving, Texas. The stock has long been a foundational company for the American economy and is a component of the S&P 500, the S&P 100, and the Dow Jones Industrial Average. The company currently has a market capitalization of nearly $88 billion.

Most would immediately think of heavy construction machinery for Caterpillar, and they wouldn’t be wrong. Steam tractors were the original machines made by Caterpillar, but since then it has certainly expanded its horizons. Aside from heavy machinery, Caterpillar even has its own clothing brand, line of mobile work phones, and financial products.

In terms of its defense history, Caterpillar produced the first tanks used in World War I that were introduced to the battlefield in 1916. History buffs might point out that the United States did not join World War I until 1917. It was actually Caterpillar’s British subsidiary that was building the war machines for the British Royal Army. Since then, Caterpillar Defense Products continues to be stationed in the UK, and provides a number of military vehicles to European militaries. These include tanks, combat engineering vehicles, armored personnel carriers, and even submarines.

Caterpillar Inc Dividend history

Caterpillar has a long history of paying out dividends and rewarding its shareholders. Like its rivals General Dynamics (NYSE:GD) and Raytheon Technologies (NYSE:RTX), Caterpillar is a proud dividend aristocrat. Earlier this year, the company raised its dividend for a staggering 28th consecutive year to a current annualized dividend yield of 2.89%. Last quarter alone, Caterpillar returned a total of $1.7 billion to shareholders through dividends and share buybacks.

It should be noted that even during an uncharacteristically down year for the stock, Caterpillar has continued to raise its dividend despite the current economic climate. This year, investors have realized that defense stocks have been able to outperform the market and provide meaningful returns even in a bear market. Not only does Caterpillar have a strong defense division, but it is also an industry leader in the global heavy machinery sector.

Is Caterpillar Inc a Good Investment?

It doesn’t get much more blue-chip than Caterpillar Inc when it comes to foundational American companies that are crucial to the national and global economies. Caterpillar provides stability and is a strong core holding in any portfolio. With its status as a true dividend aristocrat, investors should expect continuous dividend raises for the long-term future. Caterpillar prides itself on being able to raise its dividend every year, and investors should feel good about acquiring Caterpillar stock at currently depressed prices.