I like it.

Caterpillar

DOW JONES NEWSWIRES

Caterpillar Inc.'s (CAT) fourth-quarter net income increased 4.3%, helped by its machinery and engines business, and the Dow component maintained its 2007 outlook.

For 2007, the company expects per-share earnings of $5.20 to $5.70 a share. In October, the Peoria, Ill., heavy-equipment maker said earnings would be flat to up 10% from the midpoint of its 2006 earnings outlook of $5.05 to $5.30 a share.

Caterpillar sees 2007 revenue of $41.5 billion to $43.6 billion, which is flat to up 5% from 2006. The company said in October 2007 sales would be flat to up 5% year over year.

Analysts expect, on average, per-share earnings of $5.54 on revenue of $41.06 billion.

Shares of Caterpillar rose $1.37, or 2.3%, to $61 in premarket trading.

Caterpillar's fourth-quarter net income rose to $882 million, or $1.32 a share, from $846 million, or $1.20 a share, a year earlier.

Revenue jumped 14% to $11 billion from $9.66 billion a year earlier. The company's three principal lines of business all fared well. Sales of machinery, the company's largest business, rose 13%, while engine sales increased 17% and financial products revenue was up 9%.

On average, analysts polled by Thomson Financial expected earnings of $1.34 a share on revenue of $10.5 billion.

Caterpillar's outlook has remained strong for many of the industries it serves, including oil and gas production, mining, large infrastructure projects and non-residential construction.

But this has been overshadowed by a slowing U.S. housing market, bottlenecks in the company's supply chain and its inability to produce its machinery fast enough to meet demand.

Caterpillar said U.S. economic growth was stronger than expected for the fourth quarter, rebounding from a weak third quarter. The company sees the Federal Reserve keeping interest rates steady well into 2007 rather than having to react to a rapidly deteriorating economy, as Caterpillar said seemed likely last quarter.

Last week, Caterpillar said the market cycle for machinery makers appears to be similar to a decade ago, with a slowdown likely to last a year or two before higher earnings return.

Analysts have said the current year could be difficult as far as demand for light-construction equipment goes, with high inventories for Caterpillar dealers and slower home-building activity potentially leading to a discount in machine prices.

On Monday, Caterpillar shares hit a 52-week low of $57.98 after plunging nearly 15% in October, the largest one-day drop in 19 years, after third-quarter results were lower-than-expected and the company trimmed its 2006 product outlook. Caterpillar's 52-week high was $82.03 on May 10.

-Jonathan Vuocolo and Josee Rose; 201-938-5964; jonathan.vuocolo@dowjones.com, josee.rose@dowjones.com

(END) Dow Jones Newswires

01-26-07 0819ET

Copyright (c) 2007 Dow Jones & Company, Inc.

Steady Returns, Great Dividends. A Time Honored Company.

The owner of Macy's and Bloomingdales. Strong and Consistent. Great Dividends. P/E is kind of high, but I think the returns are sustainable.

All Indicators Point to continued Growth. Great Dividends.

Incredible Consistent Returns and Super High Dividends. Well worth the price tag.

Picking Dividend ETFs

By Morningstar

The battle of the dividend-focused exchange-traded funds may already be over. At least in terms of assets and fund flows, iShares Dow Jones Select Dividend Index (DVY, news, msgs) looks dominant. Its main rival, PowerShares HighYield Dividend Achievers (PEY, news, msgs), has amassed a respectable $287 million in net assets since its December 2004 launch. However, that's still less than a third of the $947 million in net new money that iShares Dow Jones Select Dividend gathered in the first two months of 2005.

Asset flows don't tell the whole story, though. Despite the size disparity, it's hard to render definitive judgment on which ETF is better because their real-world track records are so short (the iShares ETF has been around for less than two years and the PowerShares fund for little more than one quarter). That doesn't stop people from asking, however, so let's look at how these two yield-centric ETFs stack up so far.

On the surface, the funds look similar: They both try to offer exposure to stocks that have above-average yields and the ability to continue paying and increasing their dividends. The benchmarks they track, however, use different recipes.
The details
The Select Dividend Index, which was created in 2003, looks for 100 stocks in the Dow Jones U.S. Total Market Index that have increased their dividends over the last five years without ever missing or cutting a payout. To ensure its constituents are liquid and financially viable, the Select Dividend Index requires its members to have three-month average daily trading volumes of at least 200,000 shares and to have retained an average of 40% of their earnings in the previous five years. The bogey weights its components based on the dollar amount of their dividends and rebalances once a year in December.

The PowerShares fund, on the other hand, tracks the Mergent Dividend Achievers 50. That benchmark includes the 50 highest-yielding members of the Dividend Achievers, a list of stocks that have increased their dividends in each of the last 10 years. Equity data and research firm Mergent has compiled the list for more than 20 years, but the Dividend Achievers 50 has been published only since late 2004. The index's quality screen is its insistence on a consistent record of dividend increases. It arranges its holdings by yield and rebalances quarterly.

An EtF that tracks Dividend Stocks that gives a great yield in the end of the year.

Nice Dividends. Slow and Steady rate of Returnn