Harley Revs Up Its Dividend, Still Room For Growth

Harley-Davidson, Inc. (NYSE: HOG) has announced that its Board of Directors approved a cash dividend of $0.30 per share for the third quarter of 2007. The dividend is payable October 11, 2007 to the holders of record of the Company’s common stock on October 1, 2007. This represents an increase of 20% over the previous dividend paid on June 19, 2007.

Let’s have a quick look at some numbers and see if this dividend increase is a sign of better things to come from Harley Davidson!

The Financials

P/E Ratio (TTM) 11.52
P/E High - Last 5 Yrs. 32.34
P/E Low - Last 5 Yrs. 14.07
Beta 1.07
Price to Sales 1.85
Price to Book 4.53
Price to Cash Flow 9.33
Price to Free Cash Flow 21.09

The Dividend

Dividend Yield 2.14
Dividend Yield - 5 Year Avg. 0.75
Dividend 5 Year Growth Rate 47.76
Payout Ratio [TTM] 21.67

Conclusion

The numbers that most strike me are the average dividend yield and the dividend payout ratio.

Harley Davidson is currently paying a dividend yield that is very much greater than its average and their dividend payout ratio is still very low.

This means that even though they have a healthy dividend yield, there is still room to grow the dividend and re-invest profits into the company.

This is good news for investors who might want to add a little HOG to their portfolio.

Disclosure: I do not own shares of Harley Davidson.

Comments

[ferretrx]

Sorry to pick on you Tyler, but one thing lead to another. Yes, based upon its long-term record and its current P/E of only 12.5 X this year's recently downward revision to $ 3.74, HOG looks deceptively cheap. For over 25 years management has done a brilliant job reaching into the psyche of American men with inadequate feelings of masculinity. Increasingly these middle-aged fellows can now acheive the supplementation they require thanks to Viagra, Levitra and Cialis. All of which provide much more satisfaction.

With regard to HOG's earnings, the company has had to reach deeper and deeper into the barrel to maintain their long skein of continuous year-to-year with questionable accounting techniques as competition from other bike manufacturers has increased including several new entrants. HOG has become so common place that it has actually seen its cache slip.
Despite the combined efforts of Bernanke, Paulson, Congress, and
Bush, I believe we are headed into a recession. Those estimates in excess of $4.00 for 2008 will never see daylight in my opinion. In fact, I'll bet you they will decline from 2007.

It's too late to short this stock, but much too early to buy. It's
still a fine company and should be followed for a buying opportunity which I guess is at least a year away. Needless to say, I have no position in Harley.