Understanding PACCAR Inc's Upcoming Dividend and Historical Performance
PACCAR Inc (PCAR, Financial) recently announced a dividend of $0.27 per share, payable on 2024-03-06, with the ex-dividend date set for 2024-02-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into PACCAR Inc's dividend performance and assess its sustainability.
What Does PACCAR Inc Do?
PACCAR Inc is a premier manufacturer of medium- and heavy-duty trucks under the renowned brands Kenworth, Peterbilt, and DAF. Its products are a common sight across the NAFTA region, Australia, Europe, and South America, supported by a robust network of over 2,300 independent dealers worldwide. PACCAR Inc also extends its services to financing, providing retail and wholesale solutions through PACCAR Financial Services. With a significant market share of 30% in North America's Class 8 segment and 17% in Europe's heavy-duty market, PACCAR Inc stands as a substantial player in the industry.
A Glimpse at PACCAR Inc's Dividend History
PACCAR Inc has not only maintained a consistent dividend payment record since 1985 but has also increased its dividend annually since 2010, earning the title of a dividend achiever. This distinction is reserved for companies that have consistently raised their dividends for at least 14 consecutive years. The graph below illustrates the annual Dividends Per Share to help track the historical trends of PACCAR Inc's dividend growth.
Breaking Down PACCAR Inc's Dividend Yield and Growth
PACCAR Inc's current 12-month trailing dividend yield stands at 1.00%, with a forward dividend yield projected at 1.04%. This forward-looking metric indicates an anticipated increase in dividend payments over the next year. However, the current yield is near a 10-year low and lags behind 82.95% of global competitors within the Farm & Heavy Construction Machinery industry, which could be less attractive to income-focused investors.
The company's dividend growth rates are more encouraging. Over the past three years, the annual dividend growth rate was 6.80%, dipping slightly to a 6.10% annual increase over a five-year period. The decade-long annual growth rate remains steady at 6.80%. Consequently, the 5-year yield on cost for PACCAR Inc's stock is approximately 1.34%, as per today's valuation.
The Sustainability Question: Payout Ratio and Profitability
An essential factor in dividend sustainability is the payout ratio, which stands at 0.11 for PACCAR Inc as of 2023-12-31. This low ratio implies that the company retains a substantial portion of its earnings, which could be used for future growth or to weather economic downturns. PACCAR Inc's profitability rank is also impressive, scoring 9 out of 10, indicative of strong earnings potential relative to its peers. The consistency of positive net income over the past decade further cements its financial stability.
Growth Metrics: The Future Outlook
Looking ahead, PACCAR Inc's growth rank of 9 out of 10 signals robust future prospects. Its revenue per share and 3-year revenue growth rate outperform approximately 85.15% of global competitors, hinting at a solid revenue model. The company's 3-year EPS growth rate and 5-year EBITDA growth rate also surpass those of many global competitors, indicating a capacity for sustained earnings and, by extension, reliable dividends.
Next Steps and Conclusion
In conclusion, PACCAR Inc's consistent dividend payments, growth rate, low payout ratio, and strong profitability and growth metrics paint a picture of a company with a robust dividend profile. Investors considering PACCAR Inc for its dividend offerings should find reassurance in these numbers, suggesting a sustainable income stream moving forward. As always, it's essential to consider the full financial picture, and GuruFocus Premium users can leverage tools like the High Dividend Yield Screener to identify similar high-dividend yield investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
