In a bid to boost shareholder value, PACCAR Inc. PCAR has announced an extra cash dividend of $1.40 per share. The dividend will be paid on Jan 5, 2016, to shareholders on record as of Dec 18, 2015.
The board of directors of PACCAR also announced a regular dividend of 24 cents per share. This will be paid on Mar 3, 2016 to shareholders on record as of Feb 12. The total dividend, including the regular and the extra dividend, implies an yield of more than 4% for 2015, which is among the top 100 companies in the S&P 500.
The extra dividend reflects management’s confidence in the overall business. Over the years, the company has generated higher profits and strong cash flow. This helped it invest in new innovative vehicles, expand its aftermarket distribution centers and enhance its production facilities. The company has been paying dividends regularly since 1941.
PACCAR’s earnings for third-quarter 2015 increased 16.3% to $1.21 per share from $1.04 recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of $1.16. Net income surged 16.1% to $431.2 million, driven by higher truck sales in North America and Europe as well as outstanding aftermarket parts and financial services results globally. The company generated $1,851.2 million in cash from operating activities for the nine months ended Sep 30, 2015 compared with $1,601.6 million in the prior-year period.
PACCAR remains committed to maximizing shareholder value. In Jul 2015, PACCAR increased its quarterly cash dividend by 9% to 24 cents from 22 cents paid earlier. In Dec 2014, the company announced an extra cash dividend of $1.00 per share. The strong net income and cash flows of the company prompted this special dividend.
PACCAR currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked automobile stocks include General Motors Company GM, Fox Factory Holding Corp FOXF and O'Reilly Automotive Inc. ORLY. All these stocks carry a Zacks Rank #2 (Buy).
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