Share price of Penske Automotive Group, Inc.PAG gained 2.12% to close at $50.59 on Oct 15, 2015 after the company announced an increase in its dividend. In order to boost shareholder value, Penske Automotive increased its quarterly cash dividend by 4.2% to 25 cents per share from the prior payout of 24 cents. The new dividend will be paid on Dec 1, to shareholders on record as of Nov 10, 2015.
Penske Automotive announced the dividend hike as it is confident of its overall business. The increased dividend implies an annual yield of 1.98%, based on the closing share price of $50.59 as of Oct 15.
Penske Automotive has a strong financial position which allows the company to focus on capital deployment. The company returned $78.5 million to its shareholders in the form of dividends or through share repurchases last year. In Jul 2015, Penske Automotive announced a 4.3% increase in its quarterly cash dividend to 24 cents per share from 23 cents paid earlier.
During the first half of 2015, Penske Automotive repurchased 439,383 shares at $50.07 per share for a total of $22 million. As of Jun 30, 2015, the company had $136 million remaining under its share repurchase authorization. During the first half of 2015, the company also repurchased 156,383 shares from employees for $8 million, at an average price of $51.05. The share repurchases and dividend hikes reflect the company's commitment toward enhancing shareholder returns.
Penske Automotive, which currently carries a Zacks Rank #2 (Buy), is set to report third-quarter 2015 results on Nov 4. In the trailing four quarters, it delivered average positive earnings surprise of 2.12%. The Zacks Consensus Estimate for the third quarter is pegged at $1.01 per share.
Stocks to Consider
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Latest Markets Videos
- Stimulus Update: MIllions Will Get a Stimulus Check in June. Are You One of Them?
- Social Security Checks Could Soar in 2023: Here's How Much Extra Seniors Might Receive
- Better Buy: Dogecoin vs. Terra Classic vs. Terra (LUNA)?
- Bitcoin Uses 50 Times Less Energy Than Traditional Banking, New Study Shows