Harley-Davidson Inc's Dividend Analysis
Assessing the Sustainability of Harley-Davidson's Upcoming Dividend
Harley-Davidson Inc (NYSE:HOG) recently announced a dividend of $0.17 per share, payable on 2023-12-27, with the ex-dividend date set for 2023-12-08. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Harley-Davidson Inc's dividend performance and assess its sustainability.
What Does Harley-Davidson Inc Do?
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Harley-Davidson is a global leading manufacturer of heavyweight motorcycles, merchandise, parts, and accessories. It sells custom, cruiser, and touring motorcycles and offers a complete line of Harley-Davidson motorcycle parts, accessories, riding gear, and apparel, as well as merchandise. Harley-Davidson Financial Services provides wholesale financing to dealers and retail financing and insurance brokerage services to customers. Harley has historically captured about half of all heavyweight domestic retail motorcycle registrations, a metric it had ceded in 2020 as it repositioned the business, and has yet to restore (at 39% in the third quarter). In recent years the firm has expanded into the adventure touring market with its Pan America model and into electric with the LiveWire brand.
A Glimpse at Harley-Davidson Inc's Dividend History
Harley-Davidson Inc has maintained a consistent dividend payment record since 1993. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Harley-Davidson Inc's Dividend Yield and Growth
As of today, Harley-Davidson Inc currently has a 12-month trailing dividend yield of 2.01% and a 12-month forward dividend yield of 2.04%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Harley-Davidson Inc's annual dividend growth rate was -25.10%. Extended to a five-year horizon, this rate increased to -20.70% per year. And over the past decade, Harley-Davidson Inc's annual dividends per share growth rate stands at -3.20%.
Based on Harley-Davidson Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Harley-Davidson Inc stock as of today is approximately 0.63%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Harley-Davidson Inc's dividend payout ratio is 0.13.
Harley-Davidson Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Harley-Davidson Inc's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Harley-Davidson Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Harley-Davidson Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Harley-Davidson Inc's revenue has increased by approximately 4.30% per year on average, a rate that underperforms approximately 56.79% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Harley-Davidson Inc's earnings increased by approximately 21.40% per year on average, a rate that underperforms approximately 34.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.00%, which underperforms approximately 48.21% of global competitors.
Next Steps
Investors in Harley-Davidson Inc can take comfort in the company's consistent dividend payments, despite the historical dividend growth rate fluctuations. The current payout ratio indicates a sustainable dividend policy, supported by a strong profitability rank. However, the mixed performance in growth metrics suggests a need for close monitoring of the company's future revenue and earnings potential. As Harley-Davidson Inc navigates the evolving motorcycle industry landscape, investors should consider both the dividend yield and the company's capacity for growth when evaluating its stock for their portfolios. For those seeking additional investment opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
