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If Cisco is having a stellar year in 2013, heavy vehicle maker
PCAR) isn't that far behind. Year-to-date, shares of the truck builder have rallied more than 27%. Paccar manufactures light to heavy-duty trucks under the well-known Peterbilt, Kenworth, and DAF names.
As consumption continues to grow green sprouts in the economy, Paccar is benefitting. An aging global fleet of trucks is providing sales opportunities at PCAR, particularly given the gradual upward growth of oil prices over the last several years. Because Paccar's new generation of trucks are more fuel-efficient than previous generations, customers that upgrade their fleets are able to capture considerable cost savings. That, in turn, closes the gap between PCAR's truck transportation offerings and rail, which typically wins out among shippers when oil prices rise.
Paccar boasts a well-capitalized balance sheet, with around $2.5 billion in cash that helps to offset a $7.8 billion debt load. Truck building is capital intense, but PCAR has ample liquidity right now. Consistent profit margins and a relatively low payout ratio leave room for PCAR to hike its 1.39% dividend yield. Right now, the firm pays a 20-cent quarterly dividend. That could change when the firm announces numbers on July 24. Stay tuned.
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