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Harley-Davidson Declares Dividend of $0.35 Per Share

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Price movement

Harley-Davidson (HOG) has a market cap of $9.6 billion. It rose by 0.80% to close at $52.75 per share on August 30, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -2.4%, 2.1%, and 18.2%, respectively, on the same day.

HOG is trading 1.3% below its 20-day moving average, 4.8% above its 50-day moving average, and 14.1% above its 200-day moving average.

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Related ETFs and peers

The Vanguard Mid-Cap ETF (VO) invests 0.27% of its holdings in Harley-Davidson. VO tracks the CRSP US Mid-Cap Index, a diversified index of mid-cap US companies. VO’s YTD price movement was 8.8% on August 30.

The Vanguard Large-Cap ETF (VV) invests 0.04% of its holdings in Harley-Davidson. The ETF tracks a market cap–weighted index that covers 85% of the market capitalization of the US equity market.

The market caps of Harley-Davidson’s competitors are as follows:

  • Polaris Industries (PII) — $5.7 billion
  • Textron (TXT) — $11.1 billion

Harley-Davidson declared a dividend

Harley-Davidson has declared a quarterly cash dividend of $0.35 per share on its common stock. The dividend will be paid on September 23, 2016, to shareholders of record on September 13, 2016.

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Performance in 2Q16

Harley-Davidson reported 2Q16 motorcycles and related products revenue of $1.67 billion, a rise of 1.2% from the $1.65 billion it reported in 2Q15. The company’s retail sales in the United States and Latin America fell by 5.2% and 5.0%, respectively, compared to 2Q15. Its retail sales in Canada, EMEA (Europe, the Middle East, and Africa), and the Asia-Pacific region rose by 2.0%, 8.2%, and 0.75%, respectively, between 2Q15 and 2Q16.

Harley-Davidson’s financial services revenue was $191.0 million in 2Q16, a rise of 10.0% compared to the same period last year. The company’s gross profit of motorcycles and related products and its operating income fell by 7.2% and 10.9%, respectively, between 2Q15 and 2Q16.

Its net income fell to $280.4 million, and its EPS (earnings per share) rose to $1.55 in 1Q16, compared to $299.8 million and $1.44, respectively, in 1Q15. Harley-Davidson’s cash and cash equivalents and finance receivables both rose by 19.7%, respectively, and its inventories fell by 36.6% between 4Q15 and 1Q16. Its current ratio rose to 1.7x in 1Q16 from 1.4x in 4Q15. It reported a long-term debt-to-equity ratio of 2.6x in both 4Q15 and 1Q16.

Projections

The company has made the following projections for 2016:

  • motorcycle shipments of 264,000—269,000, a rise of approximately -1%—1% from 2015
  • an operating margin of ~15%–16% for the Motorcycles segment
  • capital expenditure of $255 million–$275 million
  • an effective tax rate of ~33%

The company made the following projections for 3Q16:

  • motorcycle shipments of 49,000–54,000

In the next part of this series, we’ll discuss Greif (GEF).

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