Income investors should look at this stock for a growing dividend, increasing earnings per share and a 40% potential upside in stock price. The Company has increased dividends for 11 straight quarters, increased EPS 21% in latest quarter and trades at a current price to sales ratio of 0.27.
Penske Automotive Group (NYSE: PAG), an international transportation services company, announced the highest third quarter and nine months income from continuing operations and related earnings per share in company history. For the third quarter 2013, income from continuing operations attributable to common shareholders increased 21.0% to $66.0 million and related earnings per share increased 21.7% to $0.73 per share when compared to adjusted figures for the same period last year of $0.14 per share.
The big auto retailer logged a 12% jump in 3Q same-store sales, outpacing larger rival AutoNation (AN), and service-and-parts margins also rose strongly. But average profit/car sold was essentially flat from a year ago for both new and used vehicles. Nonetheless, Sterne Agee says, “PAG’s luxury and import portfolio, concentration in the UK market (34% of revenue) and the company’s ability to improve cost accounted for the better-than-expected financial performance. We expect the positive trends to continue in 2014.”
On October 23, 2013 Penske increased its dividend by 6.3%. Commenting on the dividend, Penske Automotive Group
President Robert H. Kurnick, Jr., said, “Our Board of Directors is pleased to offer our shareholders a 6.3% increase in the quarterly dividend to $0.17, demonstrating the continued confidence we have in the strength of the auto retail marketplace and in our ability to continue growing our business.”
Penske has increased dividend s for 11 straight quarters as the dividend paid in Q2 2011 was $0.07 per share. Today (Q4 2013), the Company is paying $0.17 per share for this quarter. This is an increase of 143% over a little more than 2 years. Penske has a 5-year average annual dividend growth rate of 13%. The Company has a current dividend yield of 1.5%.
Penske is projected to have earnings of $2.73 per share in calendar year 2013. The Company is projected to grow earnings by 15% to $3.15 in 2014. Carmike is projected to increase EPS by another 10% to $3.45 in 2015.
The stock has an equity summary score of 7.9 out of 10 for a BULLISH outlook. Thomson Reuters consensus has a buy rating of 2.3 on the stock. Penske Auto Group (NYSE: PAG) has a 12-month price target of $63.00 which is an increase of 40% from the current trading level.
Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, is an international transportation services company, operating retail automotive dealerships, Hertz car rental franchises and commercial vehicle distribution. The company currently operates principally in the United States, Western Europe, Australia and New Zealand, employs approximately 17,000 people worldwide and is a member of the Fortune 500 and Russell 2000.