PCAR  Paccar Inc.

Exchange

NASDAQ

Sector

Capital Goods

Industry

Auto Manufacturing

Market Cap.

23.73B

Vuru Grade

26.50/100

Current Price

$67.62
+0.03 (+0.04%)

Growth Price

$24.04
Overvalued by 64.44%

Company Metrics

  • P/E 45.69
  • P/S 1.39
  • P/B 3.50
  • EPS 1.48
  • Cash ROIC 3.21%
  • Cash Ratio 0.52
  • Dividend 0.96 / 1.42 %
  • Avg. Vol. 1.95M
  • Shares 350.93M
  • Market Cap. 23.73B

Company Description

PACCAR Inc, together with its subsidiaries, designs, manufactures, and distributes light-, medium-, and heavy-duty trucks and related aftermarket parts primarily in the United States and Europe. It markets its heavy-duty diesel trucks under the Kenworth, Peterbilt, and DAF nameplates. The company sells its products for use in over-the-road and off-highway hauling of freight, petroleum, wood produc... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Analysts Near-Term outlook: Adobe Systems Incorporated (ADBE), PACCAR Inc (PCAR)
The USA Commerce - Mar 24, 2017
Shares of Adobe Systems Incorporated (NASDAQ:ADBE) surged 0.52% to $126.87. During the trading on 03/23/2017, Company's stock ranged from $127.25 to $126.01.
Federated Investors Inc. PA Has $510000 Position in PACCAR Inc (PCAR)
Chaffey Breeze - Mar 24, 2017
PACCAR logo Federated Investors Inc. PA lowered its stake in shares of PACCAR Inc (NASDAQ:PCAR) by 37.6% during the fourth quarter, according to its most recent disclosure with the Securities and Exchange Commission.
PACCAR Inc (PCAR) Stock Rating Reaffirmed by Royal Bank of Canada - BBNS
Movers to Watch: PACCAR Inc. (PCAR), Deutsche Bank AG (DB) - TRA
PACCAR Inc (PCAR) Rating Reiterated by Jefferies Group LLC
BNB Daily (blog) - Mar 21, 2017
PACCAR logo PACCAR Inc (NASDAQ:PCAR)'s stock had its “buy” rating reaffirmed by Jefferies Group LLC in a research note issued to investors on Friday.
Buy, Sell or Hold? Analysts Approach: PACCAR Inc (PCAR), Lowe's Companies, Inc ... - The USA Commerce
Why to Keeping Eye on PACCAR Inc (PCAR), The Kraft Heinz Company (KHC)?
StockNewsJournal - Mar 21, 2017
Investors who are keeping close eye on the stock of PACCAR Inc (NASDAQ:PCAR) established that the company was able to keep return on investment at 2.88 in the trailing twelve month while Reuters data showed that industry's average stands at 5.86 and ...
Stock Valuation in Focus for PACCAR Inc (NasdaqGS:PCAR)
Business Review - Mar 23, 2017
The ERP5 Rank is an investment tool that analysts use to discover undervalued companies. The ERP5 looks at the Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC.
Price Alert: PACCAR Inc (NASDAQ:PCAR) Stock Nears Resistance -- Technicals Hit ...
CML News - Mar 24, 2017
Price Alert: PACCAR Inc (NASDAQ:PCAR) has now crossed into technical strength -- watch the technical oscillators for momentum gaps.
How Does the Chart Look for PACCAR Inc (PCAR) ?
The USA Commerce - Mar 22, 2017
We have gathered the technical data on PACCAR Inc (PCAR), and see some interesting trends in the stock's behavior of late.
Chipmaker Nvidia says working with Paccar on driverless trucks
Reuters - Mar 16, 2017
U.S. chipmaker Nvidia Corp said on Thursday it was working with truckmaker Paccar Inc to develop autonomous vehicles. Paccar, which manufactures the Kenworth, Peterbilt and DAF lines of trucks, has developed a proof-of-concept self-driving truck using ...
Nvidia chips to power Bosch, Paccar self-driving tech - Automotive News (subscription) (blog)
PACCAR Inc (NASDAQ:PCAR) Peterbilt To Expand Its Next Generation Chassis Routing
Traders350 - Mar 24, 2017
PACCAR Inc (NASDAQ:PCAR) Peterbilt has announced its plans to expand the Next Generation Chassis Routing. It introduced its new chassis for its Models 579 and 567 and its iconic Model 389.
Option Trading: PACCAR Inc (NASDAQ:PCAR) A Clever Short Put Spread Implementation
CML News - Mar 23, 2017
As we look at PACCAR Inc we note that a short put spread is one of the most common implementations of an option strategy during a bull market, but the analysis completed when employing the short put spread often times lacks the necessary rigor ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for PCAR to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate PCAR's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$67.62 Current Price

$24.04 Growth Price (DCF)

Overvalued by 64.44%


Growth Rate Assumed by Market: 49.45%


Future Free Cash Flow Growth Rate: -6.9%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$57.83 Book Price

Overvalued by 14.48%


Poor Cash Return on Invested Capital over the past 5 years

PCAR has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

PCAR has only created $3.21 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow -284.40M 502.90M 586.30M 830.80M 335.90M
divided by
Invested Capital 10.36B 12.43B 11.93B 11.93B 11.76B
Cash ROIC -2.75% 4.05% 4.91% 6.97% 2.86%

Excellent Return on Equity over the past 5 years

Over the past 5 years, PCAR has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

PCAR has generated $17.52 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.11B 1.17B 1.36B 1.60B 521.70M
divided by
Stockholders' Equity 5.85B 6.63B 6.75B 6.94B 6.78B
Return on Equity 19.01% 17.66% 20.12% 23.11% 7.70%

Good Business Performance over the past 10 years

It's likely PCAR has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is PCAR has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

PCAR has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 788.00M -245.10M 1.25B 1.38B 1.25B -284.40M 502.90M 586.30M 830.80M 335.90M

Weak Balance Sheet

PCAR's financial position is not ideal. The key is to check whether PCAR is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 2.64B 2.13B 2.13B 2.49B 3.02B 2.47B 3.02B 3.01B 3.46B 3.06B
Current Assets 13.07B 11.74B 10.04B 9.93B 4.95B 12.78B 13.97B 14.32B 14.69B 4.87B
Total Assets 17.23B 16.25B 14.57B 14.23B 17.17B 18.63B 20.73B 20.62B 21.11B 21.65B
Current Liabilities 6.87B 5.65B 7.61B 7.08B 10.08B 5.80B 5.28B 5.68B 5.72B 5.83B
Total Liabilities 12.22B 11.40B 9.47B 8.88B 11.81B 12.78B 14.09B 13.87B 14.17B 13.86B
Stockholder' Equity 5.01B 4.85B 5.10B 5.36B 5.36B 5.85B 6.63B 6.75B 6.94B 6.78B
Current Ratio 1.90 2.08 1.32 1.40 0.49 2.20 2.64 2.52 2.57 0.84
TL-to-TA 0.71 0.70 0.65 0.62 0.69 0.69 0.68 0.67 0.67 0.64

Consistent Reinvestment of Profits over the past 10 years

PCAR has consistently retained profits. This may put PCAR in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, PCAR can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 4.26B 4.72B 4.64B 4.85B 5.17B 5.60B 6.17B 6.86B 7.54B 7.48B
Retained Earnings Growth - 10.89% -1.78% 4.43% 6.78% 8.15% 10.16% 11.33% 9.81% -0.69%

Competitive Industry over the past 10 years

PCAR is likely operating in an industry with medium to low barriers to entry. This may mean that PCAR doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that PCAR invests heavily in R&D and Sales, General & Administrative expenses.

Only $5.90 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 1.23B 1.02B 111.90M 457.60M 1.04B 1.11B 1.17B 1.36B 1.60B 521.70M
divided by
Revenue 15.22B 14.97B 8.09B 10.29B 16.36B 17.05B 17.12B 19.00B 19.12B 17.03B
Net Profit Margin 8.06% 6.80% 1.38% 4.45% 6.37% 6.52% 6.84% 7.15% 8.39% 3.06%

Inconsistent Gross Profit Margins over the past 10 years

PCAR has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$27.81 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 3.30B 3.24B 1.60B 2.09B 16.07B 3.14B 3.22B 3.52B 3.82B 3.52B
divided by
Revenue 15.22B 14.97B 8.09B 10.29B 16.36B 17.05B 17.12B 19.00B 19.12B 17.03B
Gross Margin 21.71% 21.61% 19.82% 20.35% 98.24% 18.43% 18.82% 18.51% 20.00% 20.64%

High Capital Intensity over the past 10 years

PCAR spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

135.86% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 1.27B 1.55B 127.70M 168.40M 340.70M 1.80B 1.87B 1.54B 1.73B 1.96B
divided by
Net Income 1.23B 1.02B 111.90M 457.60M 1.04B 1.11B 1.17B 1.36B 1.60B 521.70M
Capital Expenditure Ratio 103.27% 152.27% 114.12% 36.80% 32.69% 162.23% 159.89% 113.14% 107.56% 376.63%

Very Strong Dividend History over the past 10 years

PCAR has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests PCAR is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 736.70M 629.20M 232.10M 251.70M 217.40M 809.50M 283.10M 623.80M 680.50M 829.30M
divided by
Shares Outstanding 373.30M 365.90M 364.90M 366.20M 364.40M 355.80M 355.20M 356.10M 355.60M 351.80M
Dividend Paid Per Share 1.97 1.72 0.64 0.69 0.60 2.28 0.80 1.75 1.91 2.36
Price at Year End 52.10 26.67 35.56 56.33 37.31 44.43 58.84 68.80 48.02 63.90
Dividend Yield 3.79% 6.45% 1.79% 1.22% 1.60% 5.12% 1.35% 2.55% 3.99% 3.69%

Strong History of Stock Buybacks over the past 10 years

PCAR has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 373.30M 365.90M 364.90M 366.20M 364.40M 355.80M 355.20M 356.10M 355.60M 351.80M
Stock Bought Back - 2.02% 0.27% -0.35% 0.49% 2.42% 0.17% -0.25% 0.14% 1.08%
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