That brings us to one of Cummins' major customers -- Paccar (PCAR - Get Report), a manufacturer of light to heavy-duty trucks that sport the well-known Peterbilt, Kenworth, and DAF names. The company is another of last week's dividend-increasers, with a 50% hike in its payout announced last Monday.
Like Cummins, Paccar has significant exposure to the industrial sector, with demand for trucks largely dependent on freight volume, construction, and manufacturing output. That said, Paccar's respected brand names and heavy overseas exposure spared the company from significant problems during the recession. Looking forward, innovation in the firm's truck offerings should play well to the aging worldwide truck fleet. From a financial standpoint, Paccar looks strong. The company has a well-capitalized balance sheet with a manageable level of total debt and nearly $2.7 billion in cash and short-term investments. Paccar's dividend should continue to perform for investors in 2011 and beyond.Paccar is one of the highest-yielding automotive stocks.