Bernard Bernstein analyst Chad Dillard highlighted Caterpillar as a potential beneficiary if large-scale data centers decide to relocate power generation infrastructure on-site. During the PJM capacity auction discussion, Dillard noted that data centers in the Mid-Atlantic region could seek self-generation solutions to ensure grid reliability and reduce transmission costs. Caterpillar’s extensive lineup of industrial gas and diesel generators, combined with its recent $2.1 billion acquisition of a leading modular power systems provider, positions the company to capture an estimated $4.5 billion annual addressable market in on-site generation equipment over the next five years.

Caterpillar has increased its annual dividend for 31 consecutive years, most recently boosting its payout by 7% last June—more than twice last year’s U.S. inflation rate of 3.4%. Since 2021, the company’s dividend per share has risen by 46.6%, far outpacing cumulative inflation of 19% over the same period. Even during the global financial crisis of 2008–2009 and the pandemic slowdown of 2020–2021, Caterpillar maintained its dividend growth streak, raising payouts by 16.7% and 7.8% respectively in those downturn years.

With construction and mining equipment orders up 15% year-over-year in the most recent quarter and a backlog valued at $60 billion, Caterpillar’s order book provides visibility into revenue streams for at least the next 12 months. Coupled with a disciplined capital allocation framework—targeting a dividend payout ratio between 25% and 35% of net income—and a share-repurchase authorization of $10 billion through 2027, the company is positioned to balance shareholder returns and reinvestment in growth initiatives. Should data center self-generation trends accelerate, incremental power systems sales could contribute 5–10% to annual equipment revenues by 2030.