CAT vs XOM: Which Dividend Stock Has More Room to Grow?

Caterpillar and Exxon Mobil are two of the most established dividend-paying companies in the world. While both have raised their payouts recently, only one has meaningful headroom to continue growing its dividends.

Caterpillar's quarterly dividend increased from $1.51 to $1.63 after it posted a record-breaking sales quarter. The company's adjusted earnings per share of $8.17 beat expectations, and CEO Joe Creed cited 'strong order rates and a growing backlog' across segments.

Exxon Mobil, on the other hand, has a 43-year consecutive dividend streak but its payout growth is capped by Brent price fluctuations. The company spent $28.36 billion on capital expenditures last year, leaving it with limited room to increase dividends further.