Penske Automotive Group, Inc. (PAG - Analyst Report) approved a 7.7% rise in cash dividend to 14 cents per share for the fourth quarter of 2012 from 13 cents. The increased dividend will be paid on Mar 1, 2013 to shareholders of record as on Feb 11, 2013.
Penske raised its dividend by 8.3% to 13 cents for the third quarter of 2012 as well. In fact, the leading automotive retailer in the U.S. raised its dividend for all the quarters in 2012, reflecting its strong financial position. The company also raised its dividend for every quarter in 2011, except the first quarter. Prior to that, the company stalled its dividend for 2009 and 2010 owing to the financial crisis.
Penske, a Zacks Rank #2 (Buy), reported adjusted earnings per share of 60 cents for the third quarter of 2012, surpassing the Zacks Consensus Estimate by $0.03. The EPS increased 20% from 50 cents in the prior-year quarter.
Revenues in the quarter rose 17.4% to $3.40 billion, beating the Zacks Consensus Estimate of $3.26 billion. The revenue growth was attributable to a 23.6% increase in retail sales to 88,151 units. On a same-store basis, revenues improved 11.7% to $2.9 billion. Same-store retail sales increased 16.6% to 81,109 units in the quarter.
Revenues from new vehicle sales grew 21.5 % to $1.76 billion, driven by a 26.3% increase in retail sales to 48,307 units, partially offset by a 3.8% decline in average transaction price to $36,497. Revenues from used vehicle sales climbed 14.7% to $995.4 million owing to a 20.4% hike in retail sales to 39,844 units, partially offset by a 4.8% decline in average transaction price to $24,982.
Penske had cash and cash equivalents of $25.9 million and its long-term debt was almost flat at $830.8 million as of Sep 30, 2012 compared with $850.2 million as of Dec 31, 2011. Debt-to-capitalization ratio improved to 39.6% as of Sep 30, 2012 from 42.7% as of Dec 31, 2011.
Other stocks that are performing well in the industry where Penske operates include Asbury Automotive Group, Inc. (ABG - Snapshot Report) and Lithia Motors Inc. (LAD - Snapshot Report) with Zacks Rank #1 (Buy) and AutoNation Inc. (AN - Analyst Report) with Zacks Rank #2 (Buy).