Penske Automotive Group Inc. (PAG) has recently announced that it will pay a quarterly cash dividend of 7 cents per share to its shareholders of record as of May 20, 2011. The dividend, which is expected to be paid on June 03, 2011, will be the company’s first dividend payment since 2008.
The approval of dividend payment reflects the company’s strong performance in the past few quarters, strong confidence in the balance sheet and future cash flow generation capabilities.
At the end of last month, Penske reported its first quarter 2011 financial results with income from continuing operations of $36.4 million and revenues of $2.86 billion. Income surged 51.7% from $24 million in the year-ago quarter while revenues climbed 15.3% from $2.48 billion a year ago.
Moreover, Penske had cash and cash equivalents of $35.2 million as of March 31, 2011, increasing substantially from $17.5 million as of December 31, 2010.
Penske acquired three franchises during the first three months of 2011, including an Audi franchise in Willoughby, Ohio and a BMW and a MINI franchise in the U.K. With these developments, Penske expects to contribute almost $100 million to its revenues annually. Further, it has planned to open Nissan and Infiniti franchises in downtown San Francisco, California during the third quarter of 2011.
Recently, the company appointed David K. Jones as the Executive Vice President and Chief Financial Officer replacing Robert O’Shaughnessy. Penske believes that David will bring unprecedented success to the company going forward.
Penske maintains a Zacks #3 Rank on its shares, which translates into a short-term Hold rating.
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