Harley-Davidson, Inc ( HOG - Analyst Report ) topped analysts’ earnings expectations in 14 out of the past 16 quarters, most recently by 9.1%. HOG increased revenues and grew profits for nine years running. The Board of Directors recently added 20 million shares to its repurchase program. The company has a current dividend yield of 1.3% and a five-year average dividend yield of 0.71%.

Full Analysis

Harley-Davidson, Inc., through its subsidiaries, produces heavyweight motorcycles, motorcycle parts and related accessories principally in the United States and internationally.

HOG has a habit of either meeting or beating analysts’ quarterly EPS estimates. In fact, over the past 16 quarters, HOG reported 14 positive surprises while matching the consensus estimate in the remaining two. Earnings per share grew 22.1% over the past five years.

On Oct 12, HOG posted third-quarter profits of $1.20 per share. Compared to the prior-year period, earnings soared 25.0%. Furthermore, the result topped analysts’ estimates by a solid 9.1%. Revenues jumped 14.7% to a record $1.64 billion, compared to $1.43 billion in second quarter of 2005.

CEO Jim Ziemer stated, “As we look to the future, the company believes it will continue to deliver EPS growth in the range of 11% to 17 % annually through 2009. We expect earnings growth to be driven by solid revenue growth, margin improvement and the benefits of strong free cash flow.” HOG’s history of increasing revenues and growing profits has been quite stellar, having done so for nine consecutive years.

The company recently launched four new models and the new Twin Cam 96 engine. It was said to be HOG’s most extensive launch of new products in the company's history.

During the first nine months of the year, HOG bought back 17.2 million shares of its common stock for a total cost of $911.0 million. Furthermore, the Board of Directors recently authorized the repurchase of up to 20 million more shares.

Steadily increasing cash flows from operating activities have enabled HOG to provide additional income to its shareholders in the form of a dividend. On Sep 14, the Board declared a quarterly cash dividend of 21 cents per common share of stock. On Apr 29, the dividend was boosted by 16.7%. The company has a current dividend yield of 1.3% and a five-year average dividend yield of 0.71%.

HOG’s return on equity of 33%, a common measure of a company’s profitability, is in line with the industry average.

HOG is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.6% since 1988. Because the Zacks Rank has a market cap bias, Growth & Income investors may find a greater number of large-cap stocks by considering both Zacks #1 Rank (Strong Buy) and Zacks #2 Rank (Buy) stocks in their selection criteria.