Where does Penske rank after its 4% announced dividend increase?

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Penske Automotive Group Incorporated (PAG) announced an annual dividend of $0.29, a 4 percent increase from the prior rate of $0.28 per share. The dividend will be paid at the new higher rate on December 1, 2016, to shareholders of record at close of business on November 10, 2016. Penske Automotive Group Inc. is currently priced at $46.58.

Listed in the table below are the annual dividend payments since 2010. Our analysis of Penske Automotive Group Inc. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
11/10/2016 0.29
8/8/2016 0.28
5/12/2016 0.27
2/8/2016 0.26
11/6/2015 0.25
8/6/2015 0.24
5/13/2015 0.23
2/6/2015 0.22
11/6/2014 0.21
8/7/2014 0.2
5/8/2014 0.19
2/6/2014 0.18
11/6/2013 0.17
8/8/2013 0.16
5/16/2013 0.15
2/7/2013 0.14
11/7/2012 0.13
8/8/2012 0.12
5/8/2012 0.11
2/8/2012 0.1
11/9/2011 0.09
8/8/2011 0.08
5/18/2011 0.07

Analysis of Penske Automotive Group Inc. is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 2.47%  223
Dividend Growth (3-6 year avg) 34.9%  36
Forward P/E 10.36  29
S&P Financial Rating B++  160
Beta 1.25  175
Total Score    623

Additional Information on P/S ratio and historical yield;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr max Yield % 5 yr lowest Yield %
2.47% 21.4% 48.4% 239.20 0.19 0.30 0.10 3.21% 0.72%

Final Analysis;

  • Penske’s dividend yield is above that of the S&P 500 Index and is above its average historical dividend yield.
  • Penske maintains a 3 year dividend growth rate of 21.4%.
  • Penske has paid out a dividend consecutively for the past 6 years.
  • Penske is trading at a low forward P/E ratio and at a high price/sales (P/S) ratio.  From a relative valuation perspective based upon P/S, Penske is overvalued.
  • Penske maintains a credit rating of B++. This is below investment grade, a negative.
  • Penske maintains a beta of 1.25, higher than the average company.

Based upon its poor financial rating and high beta, Penske Automotive Group Inc. does not qualify as one of our Top 100 Dividend Stocks.

Penske Automotive Group Inc. Dividend Yield Chart (Click to enlarge) pag2

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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