PACCAR (PCAR) DIvidends Date & History

Key Takeaways

• PACCAR Inc pays a quarterly dividend of $0.33 per share, annualizing to $1.32, with a current yield of approximately 1.05%.
• The company boasts 85 consecutive years of dividend payments, underscoring its reliability.
• Trailing payout ratio stands at 29.27%, indicating strong sustainability backed by earnings per share (EPS) of $4.51.
• Levered free cash flow (FCF) of $2.84 billion provides ample coverage for dividends.
• Occasional special dividends supplement regular payouts, totaling around 50% of net income annually.
• Average dividend growth of 9-14% over the past 5-10 years supports long-term income potential.

Dividend Overview

PACCAR Inc, a leading manufacturer of heavy-duty trucks under brands like Kenworth and Peterbilt, maintains a conservative dividend policy focused on consistency. The company currently offers a quarterly dividend of $0.33 per share, equating to an annualized $1.32 and a yield of about 1.05% based on recent stock prices around $126. Payments occur quarterly, with the most recent ex-dividend date on February 11, 2026, and payment on March 4, 2026. While not a high-yield stock, PCAR is regarded as a reliable dividend payer rather than a growth aristocrat. Special cash dividends, such as the $1.40 payout in December 2025, periodically boost returns, reflecting management's commitment to shareholders amid cyclical truck demand.

Dividend History and Growth

PACCAR has paid dividends without interruption for 85 years, a rare achievement in the capital-intensive trucking industry. Regular quarterly dividends have shown steady growth, with increases in 9 of the past 5 years at an average annual rate of 14.53%. Over longer periods, growth averages 9-12%, including special dividends that have supplemented regular payouts. For instance, annual dividends including extras have consistently represented about 50% of net income. While not a Dividend Aristocrat with 25 consecutive annual increases, the company's track record demonstrates resilience through economic cycles, with no cuts in recent decades. This strategy balances reinvestment in operations and shareholder returns.

Dividend Sustainability and Payout Ratio

PACCAR's dividend appears highly sustainable, supported by a trailing payout ratio of 29.27%, well below 50%. With TTM EPS at $4.51, earnings comfortably cover the $1.32 annual dividend multiple times over. Levered FCF of $2.84 billion further bolsters coverage, exceeding dividend obligations. Debt-to-equity ratio of 81.94% is manageable for the sector, aided by strong parts and financial services segments that stabilize cash flows. The company's conservative financial management and long-term perspective mitigate cyclical risks in truck manufacturing, ensuring ongoing dividend capacity even in downturns.

Dividend Compared to Industry Peers

In the heavy-duty truck and related manufacturing sector, PCAR's 1.05% forward yield is modest but competitive. Peer Cummins Inc (CMI), an engine supplier, offers around 1.2-1.3% yield with a 38-39% payout ratio. Oshkosh Corp (OSK), focused on specialty vehicles, yields about 1.5%. PACCAR stands out with its unmatched payment streak and lower payout ratio, prioritizing sustainability over higher yields typical in more volatile peers. Overall, PCAR provides average-to-low yield but superior consistency.

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Is This Stock Attractive for Dividend Investors?

PCAR appeals to conservative dividend investors prioritizing reliability over high yields. Its 85-year payment history and low 29% payout ratio suit those seeking stable income in a cyclical industry. Long-term holders may value the potential for special dividends and moderate growth, averaging 10% annually, alongside robust FCF coverage. Income-focused portfolios could benefit from its defensive parts business buffering truck sales volatility. However, yield-sensitive investors might find alternatives with 2%+ payouts more compelling, as PCAR's modest 1.05% lags high-yield options. Balanced investors appreciating earnings strength and shareholder returns will find it suitable, though truck market cycles warrant monitoring.

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