Company Overview - Penske Automotive (PAG) is headquartered in Bloomfield Hills and operates in the Retail-Wholesale sector, with a year-to-date price change of -2.66% [3] - The company currently pays a dividend of $1.22 per share, resulting in a dividend yield of 3.29%, significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.26% and the S&P 500's yield of 1.57% [3] Dividend Performance - Penske Automotive's annualized dividend of $4.88 has increased by 19.3% compared to the previous year [4] - Over the past five years, the company has raised its dividend five times, achieving an average annual increase of 26.65% [4] - The current payout ratio stands at 35%, indicating that the company distributes 35% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - The Zacks Consensus Estimate projects earnings for fiscal year 2025 to be $13.78 per share, reflecting a 0.29% increase from the previous year [5] Investment Considerations - Penske Automotive is considered a strong dividend investment opportunity, particularly appealing to income investors due to its robust dividend yield and growth potential [7]

Revenue and Sales Performance - In 2024, the company generated total revenue of $30.5 billion, with $26.2 billion from retail automotive dealerships, $3.5 billion from retail commercial truck dealerships, and $777.9 million from commercial vehicle distribution and other operations[13]. - The company retailed and wholesaled over 594,000 vehicles in 2024, with 72% of retail automotive franchised dealership revenue coming from premium brands[14]. - Retail commercial truck dealerships accounted for 11.6% of total revenues and 11.7% of total gross profit in 2024, with 20,947 new and used trucks sold[17]. - In 2024, the company retailed over 244,990 new vehicles, generating 46.1% of retail automotive dealership revenue and 27.0% of gross profit[32]. - The company retailed 246,608 used vehicles in 2024, contributing 33.5% of retail automotive dealership revenue and 10.7% of gross profit[34]. - Finance and insurance sales accounted for 3.1% of retail automotive dealership revenue and 19.1% of gross profit in 2024[35]. - Service and parts sales represented 11.7% of retail automotive dealership revenue and 41.7% of gross profit in 2024[38]. - Fleet and wholesale sales made up 5.6% of retail automotive dealership revenue and 1.5% of gross profit in 2024[40]. - The retail automotive dealership market in the U.S. was approximately $1.2 trillion, with 16.0 million new cars and light trucks sold in 2024, a 2.5% increase from 2023[60]. - Used vehicle sales in the U.S. reached approximately 36.8 million units in 2024, up from 35.9 million in the previous year[62]. Operational Insights - The company operates 353 retail automotive franchised dealerships, with 148 in the U.S. and 205 outside the U.S.[14]. - The company’s diversified revenue streams help mitigate the cyclicality historically found in the automotive sector[28]. - The company holds a 28.9% ownership interest in Penske Truck Leasing Co., L.P., which offers a broad range of logistics services[52]. - PTS manages a fleet of approximately 435,000 trucks, tractors, and trailers, with an average full-service leasing Class 8 tractor fleet age of about 3.4 years as of December 31, 2024[53]. - PTS operates approximately 930 locations to provide full-service truck leasing, truck rental, and contract maintenance services[55]. - The company has implemented AI-driven technologies at certain dealerships to enhance customer experience, including a voice assistant for service calls[69]. - The company focuses on a data-driven digital strategy to enhance customer engagement and streamline vehicle purchasing and service scheduling[68]. Financial Performance - Gross profit for 2024 was $5.0 billion, comprising $4.3 billion from retail automotive dealerships, $584.5 million from retail commercial truck dealerships, and $178.2 million from commercial vehicle distribution and other operations[208]. - The company expects to continue paying comparable cash dividends, having announced a cash dividend of $1.22 per share payable on March 6, 2025[195]. - As of December 31, 2024, the company had $156.8 million remaining for share repurchases under its securities repurchase program[198]. - The cumulative total return for Penske Automotive Group, Inc. was 335.24% from December 31, 2019, to December 31, 2024[204]. Market Trends and Competition - U.S. industry new light vehicle sales increased by 2.5% to 16.0 million units in 2024, with expectations for growth to 16.2 million units in 2025[22]. - North American sales of Class 6-8 medium- and heavy-duty trucks decreased by 3.0% to 473,159 units in 2024[25]. - The company faces competition in the used vehicle market, which sells approximately 36.8 million units annually in the U.S.[80]. - The company competes with a variety of financial institutions for vehicle financing, including banks and local credit unions[79]. - The company is subject to increased competition from online retailers and new entrants in the automotive market, which could adversely affect market share and profitability[140]. Regulatory and Compliance Risks - The company is subject to numerous environmental laws and regulations, which may require significant capital and operating expenditures for compliance[97]. - The company has a proactive strategy for environmental, health, and safety compliance, including regular inspections of facilities[100]. - The U.S. Environmental Protection Agency has set standards requiring vehicle manufacturers to achieve an industry-wide average target of 85 grams of carbon dioxide per mile for light-duty vehicles by model year 2032, a nearly 50% reduction from the 2026 standard[103]. - The European Parliament mandates a 55% reduction in emissions for new cars by 2030 and aims for zero carbon emissions by 2035, effectively banning new gasoline and diesel vehicles[105]. - The company is subject to operational risks from geopolitical conditions, which can affect vehicle supply chains and overall market performance[118]. - The status of emission regulations remains uncertain due to potential changes in federal policies, including the rescinding of California's zero-emission vehicle regulations[111]. - The company is subject to multiple sets of climate-related financial disclosure regulations, which may result in additional compliance costs and risks[168]. Cybersecurity and Information Systems - The company has implemented a comprehensive Information Security Program, including annual cybersecurity risk assessments and multi-layered preventive controls[182]. - The Board of Directors oversees cybersecurity threats as a critical component of overall risk management, with regular updates provided during meetings[186]. - The Chief Information Officer, with over 25 years of experience, is responsible for implementing and overseeing the Information Security Program[187]. - A cybersecurity incident involving CDK Global impacted the company's Premier Truck Group business, leading to a temporary disruption in operations[175]. - The company relies heavily on third-party vendors for its information systems, which are critical for operations, including customer relationship management and financial reporting[173]. Financial Obligations and Risks - The company has $4.0 billion in floor plan notes payable, $1.9 billion in non-vehicle long-term debt, and $5.3 billion in future lease commitments, indicating significant financial obligations[145]. - The company faces risks related to a concentrated customer base and the financial health of its customers, which could affect sales and profitability[130]. - The company retains substantial risk related to general liability, workers' compensation, and property insurance, potentially leading to significant claims and losses[113]. - The introduction of shares from Penske Corporation's pledged stock could materially adversely affect the company's stock price[172]. Employee and Workplace Insights - As of December 31, 2024, the company employed approximately 28,900 people, with about 683 covered by collective bargaining agreements[90]. - The company achieved a turnover rate of approximately 20%, which is below industry averages[92]. - In 2024, 79 of the company's dealerships were recognized in the "Automotive News Best Dealerships To Work For," including nine of the top ten spots nationally[89].

Core Insights - Penske Automotive Group (PAG) reported fourth-quarter 2024 adjusted earnings of $3.54 per share, a 2.6% increase year over year, surpassing the Zacks Consensus Estimate of $3.37 [1] - The company achieved net sales of $7.72 billion, exceeding the Zacks Consensus Estimate of $7.56 billion, and reflecting a 6.2% increase from the previous year [1] Financial Performance - Gross profit for the quarter rose 6.1% year over year to $1.26 billion, while operating income expanded 25.6% to $333.8 million [2] - Foreign currency exchange positively impacted revenues by $57 million, net income by $1 million, and earnings per share by 1 cent [2] - SG&A costs totaled $886 million, up 6.1% year over year [7] Segment Performance - Retail Automotive segment revenues increased 8.8% year over year to $6.72 billion, surpassing the Zacks Consensus Estimate of $6.4 billion [4] - Same-store retail units declined 2% year over year to 102,542, but same-store new-vehicle revenues rose 7.2% to $3.16 billion [3] - Retail Commercial Truck segment revenues decreased 14.5% to $774 million, falling short of the consensus estimate of $968 million [5] - The Commercial Vehicle Distribution and Other segment's revenues increased 18.3% to $224 million, exceeding the estimate of $199 million [6] Shareholder Actions - PAG repurchased 0.4 million shares of common stock for $58.7 million, with $156.8 million of stock repurchase authorization remaining outstanding [8] - The company increased its dividend by 2.5% to $1.22 per share, marking the 17th consecutive quarterly increase [8] Debt and Cash Position - As of December 31, 2024, Penske had cash and cash equivalents of $72.4 million, down from $96.4 million a year earlier [7] - Long-term debt decreased to $1.13 billion from $1.42 billion as of December 31, 2023 [7]

Company Overview - Penske Automotive (PAG) is headquartered in Bloomfield Hills and operates in the Retail-Wholesale sector, with a price change of 15.38% year-to-date [3] - The company currently pays a dividend of $1.19 per share, resulting in a dividend yield of 2.71%, which is significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.2% and the S&P 500's yield of 1.54% [3] Dividend Performance - The annualized dividend of Penske Automotive is $4.76, reflecting a 16.4% increase from the previous year [4] - Over the past five years, the company has increased its dividend five times, achieving an average annual increase of 26.65% [4] - The current payout ratio is 31%, indicating that the company pays out 31% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Penske Automotive's earnings in 2025 is $13.86 per share, which represents a year-over-year earnings growth rate of 0.87% [5] Investment Considerations - Penske Automotive is considered a compelling investment opportunity due to its strong dividend performance and the potential for future growth [7] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [7]

Group 1 - The individual has 22 years of experience in the energy industry, with roles in engineering, planning, and financial analysis [1] - The investment strategy focuses on matching the S&P 500 return over the long term while achieving lower volatility and higher income [1] - The individual prefers long-term positions unless there is a compelling reason to sell, seeking investment opportunities without regard to asset class, market cap, sector, or yield [1] Group 2 - The individual holds a beneficial long position in the shares of PAG through stock ownership, options, or other derivatives [2] - The article expresses personal opinions and is not compensated for it, aside from Seeking Alpha [2] - There is no business relationship with any company mentioned in the article [2]

FOURTH QUARTER AND FULL-YEAR 2024 FINANCIAL RESULTS February 2025 PENSKE AUTOMOTIVE GROUP / 1 FORWARD-LOOKING STATEMENT DISCLAIMER Statements in this presentation may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s financial performance, expectations, and future plans. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others, those related to macr ...

Financial Data and Key Metrics Changes - Revenue increased by 3% to $30.5 billion for the year, with a record revenue of $7.7 billion in Q4, representing a 6% increase [8][10] - Generated $1.24 billion in earnings before taxes, $919 million in net income, and earnings per share of $13.74, with net income growing by 24% year-over-year [9][11] - The company announced a quarterly dividend increase of three cents per share to $1.22, marking a 54% increase since the end of 2023 [9][32] Business Line Data and Key Metrics Changes - Retail auto business delivered 120,530 units in Q4, up nearly 3%, with new units increasing by 11% and average new vehicle transaction price rising by 5% to $60,288 [12][12] - Used vehicle sales declined by 6%, but gross profit per vehicle retailed increased by $349 quarter-over-quarter [12][13] - Service and parts revenue increased by 13% to $771 million, with fixed absorption in the US rising by 320 basis points to 87.5% [15] Market Data and Key Metrics Changes - In the US, new units sold increased by 10% while used units increased by 6% in Q4, with 33% of new units sold at MSRP [16] - North American Class 8 retail sales were flat at 82,000 units, with a current industry backlog of 145,500 units [19] - In the UK, same-store new units delivered increased by 1.5%, while same-store used units declined by 18% due to the transition of car shop locations [24][25] Company Strategy and Development Direction - The company aims to grow 5% through acquisitions and 5% internally, with a focus on expanding operations in the US, UK, and Australia [44][46] - Strategic acquisitions in 2024 included 23 retail automotive franchises and five commercial truck locations, representing $2.1 billion in estimated annualized revenues [33] - The company is focusing on increasing its service and parts business, which accounts for approximately 65% of total gross profit [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and profitability, highlighting the resilience of gross profit per new vehicle retailed [39] - The company anticipates continued demand for Class A commercial trucks driven by replacement purchases in 2025 [18] - Management noted that interest rates and affordability will be key factors influencing future growth [55] Other Important Information - The company generated $1.2 billion in cash flow from operations, with a free cash flow of $811 million [31] - Total inventory was $4.6 billion, with new vehicle inventory at a 49-day supply [37] - The company maintains a strong balance sheet with a debt to total capitalization ratio of 26.2% and leverage of 1.2 times [34] Q&A Session Summary Question: Acquisition opportunities and strategy for 2025 and 2026 - Management confirmed a continued focus on acquisitions, targeting a 5% growth through acquisitions while balancing stock multiples [44][46] Question: Inflection point in the auto business and growth outlook - Management indicated that the brand mix, particularly in premium brands, supports continued growth and strong gross profit [52][55] Question: Outlook for the truck leasing business in 2025 - Management expects headwinds from interest costs but anticipates a strong first quarter and improved utilization of the rental fleet [92][93] Question: Used car business growth expectations in the UK - Management noted challenges in the UK market but emphasized a focus on organic inventory growth and retention of trades [99][100] Question: Impact of negative equity on clientele - Management stated that negative equity is less of an issue due to the premium mix and leasing strategy, with subprime exposure being minimal [108][110]

FOR IMMEDIATE RELEASE PENSKE AUTOMOTIVE GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2024 RESULTS Q4 Revenue Increases 6% to $7.7 Billion, a Quarterly Record Q4 Same-Store Retail Automotive Service and Parts Revenue up 7% and Related Gross Profit up 9% Q4 Selling, General, and Administrative Expenses as a Percent of Gross Profit Decreases 70 bps to 70.3% Q4 Earnings Before Taxes Increases 23% to $315.2 Million; Earnings Per Share Increases 25% to $3.54 Q4 Earnings Before Taxes Increases 6% to $315.2 Million W ...

For the quarter ended December 2024, Penske Automotive (PAG) reported revenue of $7.72 billion, up 6.2% over the same period last year. EPS came in at $3.54, compared to $3.45 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $7.56 billion, representing a surprise of +2.11%. The company delivered an EPS surprise of +5.04%, with the consensus EPS estimate being $3.37.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall St ...

Penske Automotive (PAG) came out with quarterly earnings of $3.54 per share, beating the Zacks Consensus Estimate of $3.37 per share. This compares to earnings of $3.45 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.04%. A quarter ago, it was expected that this auto dealership chain would post earnings of $3.48 per share when it actually produced earnings of $3.36, delivering a surprise of -3.45%.Over the last four quarters ...