Polaris Industries Inc.

Polaris Industries Inc. (PII) recently declared a quarterly dividend of 39 cents per share, which translates into an industry-leading yield of 3.4%. In mid-October, the company announced third-quarter earnings of 94 cents per share, which was below the previous year’s $1.13 but 12% ahead of the Zacks Consensus Estimate.

Company Description

Polaris designs, engineers, manufactures and markets off-road vehicles (ORVs), including all-terrain vehicles (ATVs) and the Polaris RANGER™, snowmobiles and Victory motorcycles for recreational and utility use and has recently introduced a new on-road electric powered neighborhood vehicle.

Polaris also enhances the riding experience with a complete line of Pure Polaris apparel, accessories and parts, available at Polaris dealerships.

High Income

The company recently declared a quarterly dividend of 39 cents per share, which translates into an industry-leading yield of 3.4%.

The dividend is payable on November 16 to shareholders of record at the close of business on November 2.

A Solid Quarter

In mid-October, the company announced third-quarter earnings of 94 cents per share, which was below the previous year’s $1.13 but 12% ahead of the Zacks Consensus Estimate.

“Our third quarter 2009 results exceeded our expectations and clearly reflect the strength of our business model and our Polaris team,” commented Scott Wine, Chief Executive Officer of Polaris. “While the economic environment remains challenging, we continue to take the long view and invest in the business for future growth and profitability. During the third quarter, we launched and obtained orders for a broad and exciting array of new products, and also continued to drive our focus on cost and productivity to generate 160 basis points of gross margin expansion. Our operational excellence initiatives drove reductions in both total North American dealer inventory levels and total factory inventory levels compared to last year’s third quarter. In short, we are effectively executing our operating plan.”

Bullish Forecasts

Polaris upped its full-year earnings guidance to a range of $2.92 to $2.98 per share, versus the previous range of $2.70 to $2.90 per share.

Analysts polled by Zacks hiked 2009 earnings estimates to $2.96 per share from last month's $2.79. For 2010, the Zacks Consensus Estimate of $3.22 was increased from last month's $3.05.

Leading the Industry

Polaris offers a return on equity (ROE) of 62%, squashing the industry average of 1.4%. The company's net profit margin of 6% compares to a negative industry average.

Shares soared on third-quarter earnings, outpacing the market by more than 5% over the past 3 months. The company more than tripled the market's return over the past year.

Read the full analyst report on PII