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First up is
Paccar(PCAR - Get Report), the $15 billion truck manufacturer. Paccar's trucks are built under the well-known Peterbilt, Kenworth and DAF names, garnering the firm a full quarter of the U.S. market and more than 15% of the truck market in the E.U. With a 20-cent quarterly payout currently getting sent to shareholders, PCAR's yield sits at 1.85% right now. That dividend looks likely to increase in the next quarter.
Paccar is a pure play on the aging commercial truck fleet, particularly in the U.S. where the role of truck transport is more significant. The firm's trucks have a reputation for quality that helps to justify a premium pricetag. At the same time, an established dealer network should continue to fuel the company's growth without the hefty fixed costs involved in owning its own dealer network or the risks of relying on larger corporate dealers who can inflict pricing demands.
While truck manufacturing is unquestionably capital intense, the firm has a stable balance sheet with more than $2.6 billion in cash offsetting a $7.4 billion debt load. With cash generation and profitability looking strong, Paccar should be able to support a heftier dividend payout in 2012.
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