Wall Street is facing volatility amid sticky inflation, uncertainty over the Fed’s rate-cut trajectory, and fears of a potential trade war. The auto sector, being highly cyclical, faces additional challenges, including potential disruptions from U.S. tariffs on Canadian and Mexican imports. While these duties were temporarily paused in early February, their long-term impact remains unclear.
In this uncertain landscape, dividend-paying stocks can offer stability for cautious investors seeking steady income. Several auto stocks, including Harley-Davidson HOG, Magna International MGA, Oshkosh Corp. OSK, PACCAR, Inc. PCAR and Group 1 Automotive GPI, have recently raised their first-quarter 2025 dividends.
While higher payouts instill shareholder confidence, investors must assess whether these stocks are worth buying beyond their dividend hikes. Let’s take a closer look.
It is one of the leading motorcycle makers in the world.
On Friday, the company hiked its quarterly payout by 4.3% to 18 cents a share. The dividend will be paid out on March 14 to the shareholders of record as of Feb. 28, 2025. This translates to a dividend yield of 2.80%, with a payout ratio of around 20%.
Harley-Davidson's revamped operating model, streamlined structure and focus on high-potential markets are promising. The LiveWire unit strengthens its presence in the dynamic sportier market with innovative offerings. While these bode well for the long term, HOG faces near-term challenges. It expects flat 2025 retail sales. Wholesale shipments are expected to decline 5% as it manages dealer inventory, while global inventory is set to drop over 10%, including a 30% cut in the first half of 2025. The company expects EPS to be flat to down 5% in 2024, pressured by higher taxes, lower interest income and reduced pension gains. A cautious stance seems warranted at this juncture.
The Zacks Consensus Estimate for HOG’s 2025 EPS is pegged at $3.44, down 76 cents over the past 30 days. For 2026, EPS estimates have moved south by 59 cents to $4.43 in the same time frame. The consensus mark for next year’s sales and EPS implies 4% and 29% growth, respectively, on a yearly basis.
HOG currently carries a Zacks Rank #3 (Hold) and has a Value Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It is a mobility technology firm that designs, engineers and manufactures automotive systems and components.
On Friday, the company hiked its quarterly payout by 2% to 48.5 cents a share. The dividend will be paid out on March 14 to the shareholders of record as of Feb. 28, 2025. This translates to a dividend yield of 5%, with a payout ratio of around 35%.
Magna’s diverse product portfolio and strategic acquisitions enhance its efficiency and technical capabilities, while a solid liquidity profile and investor-friendly policies provide stability. To navigate macroeconomic pressure, the company is implementing restructuring and cost-cutting measures. However, uncertainty in government policies has complicated forecasting, leading Magna to cut its 2026 sales outlook and issue a weak revenue forecast for 2025. Sales are expected to drop to $38.6-$40.2 billion in 2025 from $42.8 billion in 2024, primarily due to currency headwinds, lower vehicle production and program expirations. Investors may want to stay on the sidelines for now.
The Zacks Consensus Estimate for MGA’s 2025 and 2026 EPS implies growth of 13% and 15%, respectively. However, EPS estimates for the first two quarters of 2025 have declined by 2 cents each in the past 30 days.
Magna currently has a Zacks Rank #3 and a Value Score of A.
It is one of the leading automotive retailers in the world, with operations primarily located in the United States and the U.K.
On Wednesday, the company hiked its quarterly payout by 6.3% to 50 cents a share. The dividend will be paid out on March 17 to shareholders of record as of March 3, 2025. This translates to a dividend yield of 0.4%. While the yield is not too tempting, the payout ratio is quite sustainable at just 5%. Investors should note that the company has increased dividends 12 times in the last five years, with an annualized growth rate of 12.5%.
Group 1’s diversified product portfolio and its omnichannel initiatives bolster sales potential. Strategic acquisitions of dealerships and franchises enhance portfolio optimization, strengthening long-term prospects. The firm's restructuring plan aims to improve operational efficiency in the United Kingdom with workforce realignment and facility closures, streamlining operations and reducing costs. Investor-friendly measures also instill confidence. However, affordability concerns may dampen the demand for new vehicles.
Stringent zero-emission mandates and rising electric vehicle sales targets pose macroeconomic headwinds in the U.K. market. High debt and escalating SG&A costs are also playing spoilsports. Given these factors, a wait-and-watch approach on GPI stock seems prudent.
The Zacks Consensus Estimate for GPI’s 2025 sales and EPS implies growth of 10% and 4.4%, respectively. For 2026, the consensus mark for revenues and EPS suggests year-over-year growth of 4% and 9.3%, respectively.
Group 1 currently carries a Zacks Rank #3 and has a Value Score of A.
It is engaged in designing, developing and manufacturing custom-built vehicles and equipment.
On Jan. 30, OSK hiked its quarterly payout by 11% to 51 cents a share. This was the 11th straight year that Oshkosh raised its dividend by a double-digit percentage. The dividend will be paid out on March 3 to shareholders of record as of Feb. 17, 2025. This translates to a dividend yield of 1.90%, with a payout ratio of around 16%.
Oshkosh has expanded its offerings and core capabilities through acquisitions. Despite short-term softness in the Access segment, margins remain strong and resilient, with long-term growth supported by mega projects, infrastructure expansion and data center construction.
NGDV production will scale up through 2025, reaching full capacity by year-end and fueling revenue growth into 2026. A strong balance sheet and shareholder-friendly actions bolster confidence. However, a declining backlog signals weaker future sales, with 2025 revenues expected to decline. Heavy reliance on government contracts exposes Oshkosh to policy risks and economic uncertainty. Considering the risks, waiting for a better entry point may be wise.
The Zacks Consensus Estimate for OSK’s 2025 sales and EPS implies a decline of 2.4% and 6.6%, respectively. However, for 2026, the consensus mark for revenues and EPS suggests year-over-year growth of 5% and 14%, respectively.
Oshkosh currently carries a Zacks Rank #3 and has a Value Score of A.
It is a dominant name in the trucking industry and is known for its premium brands — Kenworth, Peterbilt and DAF.
In December, PACCAR hiked its quarterly payout by 10% to 33 cents a share. The dividend will be paid out on March 5 to shareholders of record as of Feb. 12, 2025. This translates to a dividend yield of 1.25%, with a payout ratio of around 15%. Investors should note that PACCAR has paid dividends every year since 1941. Over the past five years, PACCAR increased its dividend 11 times, with an annualized growth rate of 8.15%.
Fueled by steadfast demand for its top-tier vehicles and strategic expansion initiatives, PACCAR is poised for growth. While truck sales drive most of its revenues, its expanding aftermarket parts business strengthens long-term stability. PACCAR’s robust balance sheet with A+/A1 credit ratings instills optimism. However, significant capital expenditures for advanced technologies may put pressure on near-term financials and cash flow. Additionally, the company foresees a decline in European registrations for trucks of more than 16 tons in 2025 and expects sequentially lower truck deliveries in the first quarter. For now, we maintain a neutral outlook on the stock.
The Zacks Consensus Estimate for PACCAR’s 2025 sales implies a 0.5% uptick year over year, while EPS estimates suggest a 4.2% decline. But for 2026, the consensus mark for EPS suggests year-over-year growth of 20.8%.
PACCAR currently carries a Zacks Rank #3 and has a Value Score of A.
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Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report
PACCAR Inc. (PCAR) : Free Stock Analysis Report
Magna International Inc. (MGA) : Free Stock Analysis Report
Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
Oshkosh Corporation (OSK) : Free Stock Analysis Report
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