NasdaqGS:PCAR

Stock Analysis Report

Executive Summary

PACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Europe, and internationally.

Rewards

Trading at 18.1% below its fair value

Earnings grew by 8.8% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -4.1% per year for the next 3 years

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Established dividend payer and fair value.


Similar Companies

Cummins

NYSE:CMI

Share Price & News

How has PACCAR's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PCAR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.8%

PCAR

-1.4%

US Machinery

0.5%

US Market


1 Year Return

7.3%

PCAR

9.4%

US Machinery

20.3%

US Market

Return vs Industry: PCAR underperformed the US Machinery industry which returned 9.4% over the past year.

Return vs Market: PCAR underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

PCARIndustryMarket
7 Day-0.8%-1.4%0.5%
30 Day-4.3%-1.7%2.0%
90 Day-7.7%1.4%9.4%
1 Year12.4%7.3%11.4%9.4%22.8%20.3%
3 Year25.5%10.1%37.8%29.0%50.1%40.4%
5 Year40.6%14.8%61.4%42.3%73.1%54.1%

Price Volatility Vs. Market

How volatile is PACCAR's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is PACCAR undervalued compared to its fair value and its price relative to the market?

18.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PCAR ($74.23) is trading below our estimate of fair value ($90.66)

Significantly Below Fair Value: PCAR is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PCAR is good value based on its PE Ratio (10.8x) compared to the Machinery industry average (21.3x).

PE vs Market: PCAR is good value based on its PE Ratio (10.8x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: PCAR's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: PCAR is overvalued based on its PB Ratio (2.6x) compared to the US Machinery industry average (2.2x).


Next Steps

Future Growth

How is PACCAR forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

-4.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PCAR's earnings are forecast to decline over the next 3 years (-4.1% per year).

Earnings vs Market: PCAR's earnings are forecast to decline over the next 3 years (-4.1% per year).

High Growth Earnings: PCAR's earnings are forecast to decline over the next 3 years.

Revenue vs Market: PCAR's revenue is expected to decline over the next 3 years (-4.8% per year).

High Growth Revenue: PCAR's revenue is forecast to decline over the next 3 years (-4.8% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PCAR's Return on Equity is forecast to be low in 3 years time (19.5%).


Next Steps

Past Performance

How has PACCAR performed over the past 5 years?

17.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PCAR has high quality earnings.

Growing Profit Margin: PCAR's current net profit margins (9.3%) are lower than last year (9.3%).


Past Earnings Growth Analysis

Earnings Trend: PCAR's earnings have grown by 17.2% per year over the past 5 years.

Accelerating Growth: PCAR's earnings growth over the past year (8.8%) is below its 5-year average (17.2% per year).

Earnings vs Industry: PCAR earnings growth over the past year (8.8%) exceeded the Machinery industry 1.5%.


Return on Equity

High ROE: Whilst PCAR's Return on Equity (24.6%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is PACCAR's financial position?


Financial Position Analysis

Short Term Liabilities: PCAR's short term assets ($7.6B) exceed its short term liabilities ($6.0B).

Long Term Liabilities: PCAR's short term assets ($7.6B) do not cover its long term liabilities ($12.6B).


Debt to Equity History and Analysis

Debt Level: PCAR's debt to equity ratio (129.8%) is considered high.

Reducing Debt: PCAR's debt to equity ratio has increased from 122.6% to 129.8% over the past 5 years.

Debt Coverage: PCAR's debt is well covered by operating cash flow (22.7%).

Interest Coverage: PCAR earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: PCAR has a high level of physical assets or inventory.

Debt Coverage by Assets: PCAR's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is PACCAR's current dividend yield, its reliability and sustainability?

4.82%

Current Dividend Yield


Dividend Yield vs Market

company4.8%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years3.8%

Current dividend yield vs market & industry

Notable Dividend: PCAR's dividend (4.82%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: PCAR's dividend (4.82%) is in the top 25% of dividend payers in the US market (3.73%)


Stability and Growth of Payments

Stable Dividend: PCAR's dividend payments have been volatile in the past 10 years.

Growing Dividend: PCAR's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18.6%), PCAR's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PCAR's dividends in 3 years are forecast to be covered by earnings (51.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

R. Feight (51yo)

0.6yrs

Tenure

US$2,921,495

Compensation

Mr. R. Preston Feight serves as Executive Vice President at PACCAR Inc since September 2018. He has been instrumental in PACCAR delivering revenue and profit growth, in addition to having an integral role ...


CEO Compensation Analysis

Compensation vs Market: R.'s total compensation ($USD2.92M) is below average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Insufficient data to compare R.'s compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
R. Feight
CEO & Director0.6yrsUS$2.92m0.0064% $1.6m
Harrie C. A. Schippers
President & CFO2.1yrsUS$3.95m0.011% $2.7m
Gary Moore
Executive Vice President5.1yrsUS$4.46m0.018% $4.7m
Mark Pigott
Executive Chairman23.1yrsUS$2.79m0.98% $252.2m
T. Quinn
Senior VP & CTO1.8yrsUS$1.87m0.0091% $2.3m
A. Ley
VP & Chief Information Officer3.1yrsno data0.0020% $516.7k
Ken Hastings
Senior Director of Investor Relations0yrsno datano data
Douglas Grandstaff
VP & General Counsel2.3yrsno data0.0026% $670.9k
Jack LeVier
Vice President of Human Resources12.7yrsno data0.0081% $2.1m
Darrin Siver
Senior Vice President3.1yrsno data0.0090% $2.3m

2.7yrs

Average Tenure

57yo

Average Age

Experienced Management: PCAR's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
R. Feight
CEO & Director0.6yrsUS$2.92m0.0064% $1.6m
Mark Pigott
Executive Chairman23.1yrsUS$2.79m0.98% $252.2m
Gregory M. Spierkel
Independent Director11.8yrsUS$305.06kno data
Charles Williamson
Lead Director6.1yrsUS$330.06k0.0091% $2.3m
Beth Ford
Independent Director4.8yrsUS$280.06kno data
Roderick McGeary
Independent Director7.4yrsUS$305.06kno data
Alison Carnwath
Independent Director14.3yrsUS$290.06k0.0084% $2.2m
Kirk Hachigian
Independent Director11.2yrsUS$285.06kno data
Mark Schulz
Independent Director7.8yrsUS$290.06k0.0026% $665.8k
John Pigott
Director10.8yrsUS$265.06k0.66% $169.0m

9.3yrs

Average Tenure

63.5yo

Average Age

Experienced Board: PCAR's board of directors are considered experienced (9.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

PACCAR Inc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: PACCAR Inc
  • Ticker: PCAR
  • Exchange: NasdaqGS
  • Founded: 1905
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: US$25.706b
  • Shares outstanding: 346.30m
  • Website: https://www.paccar.com

Number of Employees


Location

  • PACCAR Inc
  • 777 - 106th Avenue NE
  • Bellevue
  • Washington
  • 98004
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PCARNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMar 1970
PAISEAQ (SEAQ International)YesCommon StockGBGBPMar 1970
PAEDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1970
PCARWBAG (Wiener Boerse AG)YesCommon StockATEURMar 1970
PAEETLX (Eurotlx)YesCommon StockITEURMar 1970
0KETLSE (London Stock Exchange)YesCommon StockGBUSDMar 1970
P1AC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

PACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Europe, and internationally. The company operates in three segments: Truck, Parts, and Financial Services. The Truck segment designs, manufactures, and distributes trucks that are used for the over-the-road and off-highway hauling of commercial and consumer goods. It sells its trucks through a network of independent dealers under the Kenworth, Peterbilt, and DAF nameplates. The Parts segment distributes aftermarket parts for trucks and related commercial vehicles. The Financial Services segment conducts full service leasing operations under the PacLease trade name. It also provides equipment financing and administrative support services for its franchisees; retail loan and leasing services for small, medium, and large commercial trucking companies, as well as independent owner/operators and other businesses; and truck inventory financing services to independent dealers. In addition, this segment offers loans and leases directly to customers for the acquisition of trucks and related equipment. The company also manufactures and markets industrial winches under the Braden, Carco, and Gearmatic nameplates. PACCAR Inc was founded in 1905 and is headquartered in Bellevue, Washington. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:45
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.