Here's How Much You'd Have If You Invested $1000 in Penske Automotive a Decade Ago
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Penske Automotive (PAG) ten years ago? It may not have been easy to hold on to PAG for all that time, but if you did, how much would your investment be worth today?
Penske Automotive's Business In-Depth
With that in mind, let's take a look at Penske Automotive's main business drivers.
Established in 1990, Penske Automotive Group, Inc., based in Bloomfield Hills, MI, engages in the operation of automotive and commercial truck dealerships in the United States, Canada and Western Europe. The company also distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. It employs more than 23,000 people across the globe.
The company also offers higher margin products such as finance, insurance and vehicle service contracts; maintenance repair services; replacement parts and aftermarket automotive products.
Penske operates under three reportable segments, Retail Automotive, Commercial Truck and Commercial Vehicle Distribution and Other.
Retail Automotive which deals with retail automotive dealership operations generated 85.2% of revenues in 2022.
Commercial Truck, which consists of the U.S. retail commercial truck dealership operations generated 12.7% of the revenues in 2022. The company operates a heavy and medium-duty truck dealership group known as Premier Truck Group (PTG) with locations in Texas, Oklahoma, Tennessee, Georgia, and Canada.
Commercial Vehicle Distribution and Other generated 2.1% of the revenues in 2022. The company is the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler brand), MAN heavy and medium-duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles.
In 2022, its retail automotive brand mix consisted of 71% Premium, 21% Volume non-U.S., 7% Car Shop Used-Vehicle Centers and 1% General Motors/Chrysler.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Penske Automotive ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2013 would be worth $4,876.93, or a 387.69% gain, as of April 18, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 167.48% and the price of gold increased 38.15% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for PAG.
Penske is riding high on strategic acquisitions. It has become the largest dealership group for Freightliner in North America with Warner Truck Centers buyout. Buyouts of Kansas City Freightliner, McCoy and Team Trucks Centers are boosting Penske’s top line. In addition to the low leverage, Penske has more than $1.1 billion in liquidity. The company's investor-friendly moves also boost confidence. Penske Transportation Solutions (PTS) joint venture has also been boosting the prospects of Penske Automotive— which holds 28.9% in PTS. Stakes in PTS provides the company equity income, cash dividends and cash tax savings. Moreover, the firm’s sustainability initiatives augur well for long-term growth. As such, Penske appears a solid bet now.
The stock is up 6.27% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2023. The consensus estimate has moved up as well.
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Penske Automotive Group, Inc. (PAG) : Free Stock Analysis Report
