PACCAR Inc (NASDAQ:PCAR): Commentary On Fundamentals

PACCAR Inc (NASDAQ:PCAR) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of PCAR, it is a financially-sound , dividend-paying company with a an impressive track record of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on PACCAR here.

Solid track record with excellent balance sheet and pays a dividend

PCAR delivered a bottom-line expansion of 57% in the prior year, with its most recent earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 24%. which is what investors like to see! PCAR’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that PCAR has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. PCAR appears to have made good use of debt, producing operating cash levels of 0.3x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

NasdaqGS:PCAR Income Statement Export October 24th 18
NasdaqGS:PCAR Income Statement Export October 24th 18

Income investors would also be happy to know that PCAR is one of the highest dividend payers in the market, with current dividend yield standing at 4.0%. PCAR has also been regularly increasing its dividend payments to shareholders over the past decade.

NasdaqGS:PCAR Historical Dividend Yield October 24th 18
NasdaqGS:PCAR Historical Dividend Yield October 24th 18

Next Steps:

For PACCAR, I’ve put together three key factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for PCAR’s future growth? Take a look at our free research report of analyst consensus for PCAR’s outlook.
  2. Valuation: What is PCAR worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether PCAR is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of PCAR? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.