Some companies tend to raise their shareholder dividends every
few years, but car dealerPenske Automotive Group (
) has lifted its payout every few months lately.
On Tuesday, the company revved up its payout for the seventh
time in about a year and a half. It hiked its dividend by a penny
to 14 cents a share. The dividend will be paid March 1 to holders
on Feb. 11.
Increasing the dividend to 14 cents per share "demonstrates
the strength of our financial performance, our commitment to
returning capital to shareholders and the confidence we have in
the auto retail environment," said Penske Automotive Group
President Robert H. Kurnick in a news release.
With the latest dividend hike, Penske pays 56 cents a share on
an annual basis. This works out to a yield of about 1.7%, the
second highest among the five dividend-paying stocks in the
Retail/Wholesale - Automobile group. This industry group has
climbed to a No. 22 ranking out of 197 groups as of Wednesday's
IBD, up from No. 32 about three weeks ago. Penske has an IBD
Composite Rating of 97 -- the third highest in the 13-member
Tough times forced the company to halt its dividend in
February 2009. Penske reinstated its dividend program about two
years later. The company's payout has doubled since then.
Penske's earnings fell in 2008 and 2009, but grew 53% and 35%
over the next two years. It's on pace for a third straight year
of double-digit percentage growth. The auto retailer will post Q4
results Feb. 6. Analysts see Q4 profit rising 13% to 53 cents a
The firm's full-year 2012 earnings are expected to increase
25% to $2.23 a share. For 2013, analysts see its bottom line
gaining 10% to $2.46 a share.
So far this week, Penske has pulled back from a record high.
That's after it blew past a 32.46 buy point from a
cup-with-handle base on Jan. 23 in big volume. The stock passed a
30.22 trigger in a slightly low handle Dec. 31, but did so in
Penske has an up-down volume ratio of 1.6, indicating strong
demand. The stock is owned by top-performing growth funds such as
Fidelity Contra .