December 18, 2025 a 07:31 am
PCAR: Dividend Analysis - PACCAR Inc
PACCAR Inc, a leader in the automotive sector, delivers modest dividends bolstered by a steady historical record. With a focus on sustainable financial practices, PACCAR offers a consistent yield, making it a stable component of a diversified dividend portfolio. This analysis provides insights into the firm’s dividend capabilities and financial robustness.
📊 Overview
PACCAR Inc operates in the automotive sector, offering a dividend yield of 2.44% with a current dividend per share of 4.36 USD. Celebrating a 40-year dividend history, PACCAR has shown resilience, with its last cut or suspension in 2026, making it a reliable dividend payer.
| Metric | Details |
|---|---|
| Sector | Automotive |
| Dividend Yield | 2.44% |
| Current Dividend Per Share | 4.36 USD |
| Dividend History | 40 years |
| Last Cut or Suspension | 2026 |
📈 Dividend History
Understanding PACCAR's dividend history is crucial for assessing its reliability as a dividend payer. Consistently high dividends reinforce investor confidence and long-term return expectations.
| Year | Dividend Per Share (USD) |
|---|---|
| 2026 | 0.33 |
| 2025 | 2.72 |
| 2024 | 3.87 |
| 2023 | 4.24 |
| 2022 | 2.79 |
🗣️ Dividend Growth
Assessing dividend growth is fundamental in understanding PACCAR's capacity to enhance shareholder value over time. Analyzing the recent achievement of moderate dividend growth shows financial stability and growth potential.
| Time | Growth |
|---|---|
| 3 years | 0.35% |
| 5 years | 0.10% |
The average dividend growth is 0.10% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
The payout ratio indicates the proportion of earnings paid to shareholders as dividends. PACCAR's high EPS payout ratio suggests a significant commitment to returning profit to shareholders, coupled with a more conservative free cash flow payout.
| Key figure | Ratio |
|---|---|
| EPS-based | 85.14% |
| Free cash flow-based | 71.64% |
The EPS payout ratio of 85.14% implies limited retained earnings for reinvestment, while the FCF ratio of 71.64% reflects a cautious cash management approach.
🤑 Cashflow & Capital Efficiency
Cashflow and capital efficiency metrics are vital for evaluating how efficiently PACCAR converts its revenues into actual cash flows, ensuring adequate dividend coverage and maintaining operational resilience.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Free Cash Flow Yield | 5.30% | 5.72% | 4.75% |
| Earnings Yield | 7.62% | 8.99% | 8.73% |
| CAPEX to Operating Cash Flow | 37.61% | 30.13% | 45.94% |
| Stock-based Compensation to Revenue | 0% | 0% | 0% |
| Free Cash Flow / Operating Cash Flow Ratio | 62.39% | 69.87% | 54.06% |
The steady flow of free cash indicates PACCAR's strong ability to manage operations, sustain dividends, and navigate economic fluctuations.
🧾 Balance Sheet & Leverage Analysis
The balance sheet analysis helps ascertain PACCAR's financial health in terms of debt levels and the ability to service those debts, ensuring long-term sustainability.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Debt-to-Equity | 0.91 | 0.91 | 0.89 |
| Debt-to-Assets | 0.37 | 0.35 | 0.35 |
| Debt-to-Capital | 0.48 | 0.48 | 0.47 |
| Net Debt to EBITDA | 1.39 | 1.09 | 1.50 |
| Current Ratio | 2.64 | 2.50 | 2.60 |
| Quick Ratio | 2.45 | 2.30 | 2.37 |
| Financial Leverage | 2.48 | 2.57 | 2.53 |
PACCAR's sound leverage ratios demonstrate prudent financial management, providing assurance of its ability to weather debt-related risks.
🏆 Fundamental Strength & Profitability
Examining profitability through metrics such as ROE, ROA, and margins provides insight into PACCAR's operational efficiency, revealing its capability in generating profit relative to its scale.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Return on Equity | 23.77% | 28.97% | 22.87% |
| Return on Assets | 9.59% | 11.27% | 9.05% |
| Margins: Net | 12.37% | 13.09% | 10.44% |
| Margins: EBIT | 16.14% | 16.28% | 13.32% |
| Margins: EBITDA | 18.87% | 18.85% | 16.12% |
| Margins: Gross | 18.94% | 20.62% | 16.45% |
| Research & Development to Revenue | 1.35% | 1.17% | 1.18% |
PACCAR's robust ROE and well-managed margins signify effective cost control and the ability to convert revenue into profit, reflecting the company's financial expertise.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 3 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 32/40
🔍 Rating
Based on comprehensive analysis, PACCAR Inc ranks highly as a dividend-bearing asset. Its strong historical yield, consistent dividend stability, and financial resilience secure its position as a favorable option for conservative dividend portfolio inclusion. The company's prudent cash management and stable financial metrics suggest enduring viability, deserving of investment consideration.