Ricardo Pillai
2 min read
In This Article:
We came across a bullish thesis on Penske Automotive Group, Inc. (PAG) on Substack by Serhio MaxDividends. In this article, we will summarize the bulls’ thesis on PAG. Penske Automotive Group, Inc. (PAG)'s share was trading at $166.08 as of May 20th. PAG’s trailing and forward P/E were 11.70 and 12 respectively according to Yahoo Finance.
Trucks from this company on the highway, transporting goods from one city to another.
Penske Automotive (PAG), the $10 billion global dealership and commercial truck juggernaut operating across the U.S., U.K., and Australia, continues to execute with precision, recently raising its dividend by 3.3% to $1.26 per share, bringing its forward yield to a healthy 3.07%. This latest hike reflects the company's strong operational momentum, underscored by a solid first quarter for fiscal 2025. Revenue climbed 2% year-over-year to $7.6 billion, while net income surged 13.5% to $244.3 million. Earnings per share jumped to $3.66, up 14% from the prior year, with adjusted EPS rising 5.6% to $3.39. Penske also flexed its capital allocation muscle, repurchasing over 750,000 shares in the quarter for $111 million, with $45.8 million still authorized under its existing buyback program.
With a conservative leverage ratio of just 1.2x, the company retains ample balance sheet flexibility to continue rewarding shareholders. Trading around $166.54 per share, up 11% year-to-date and valued at just 10x forward earnings, Penske offers investors a compelling blend of income, stability, and global diversification. While not a high-growth story, it exemplifies disciplined execution and consistent cash generation. With a track record of shareholder-friendly moves, a strong leadership team, and resilient earnings across economic cycles, Penske Automotive is quietly firing on all cylinders. Also, check out Lithia Motors is a quiet powerhouse in the U.S. auto dealership space.
Penske Automotive Group, Inc. (PAG) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held PAG at the end of the fourth quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of PAG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PAG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
