Critical Analysis: Penske Automotive Group (PAG) & Its Peers

Penske Automotive Group (NYSE:PAG) is one of 285 public companies in the “Specialty Retail” industry, but how does it compare to its rivals? We will compare Penske Automotive Group to related businesses based on the strength of its earnings, valuation, risk, profitability, analyst recommendations, institutional ownership and dividends.

Risk & Volatility

Penske Automotive Group has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Penske Automotive Group’s rivals have a beta of 1.91, meaning that their average stock price is 91% more volatile than the S&P 500.

Earnings & Valuation

This table compares Penske Automotive Group and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Penske Automotive Group	$31.81 billion	$935.40 million	15.56
Penske Automotive Group Competitors	$7.26 billion	$386.51 million	30.89

Penske Automotive Group has higher revenue and earnings than its rivals. Penske Automotive Group is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Penske Automotive Group and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Penske Automotive Group	2.77%	14.82%	4.69%
Penske Automotive Group Competitors	-3.59%	-13.78%	3.24%

Analyst Recommendations

This is a summary of current ratings and target prices for Penske Automotive Group and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Penske Automotive Group	0	6	4	0	2.40
Penske Automotive Group Competitors	3689	15625	21647	593	2.46

Penske Automotive Group presently has a consensus price target of $214.86, indicating a potential upside of 0.72%. As a group, “Specialty Retail” companies have a potential upside of 5.08%. Given Penske Automotive Group’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Penske Automotive Group has less favorable growth aspects than its rivals.

Dividends

Penske Automotive Group pays an annual dividend of $5.76 per share and has a dividend yield of 2.7%. Penske Automotive Group pays out 42.0% of its earnings in the form of a dividend. As a group, “Specialty Retail” companies pay a dividend yield of 2.0% and pay out 35.7% of their earnings in the form of a dividend. Penske Automotive Group has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

77.1% of Penske Automotive Group shares are held by institutional investors. Comparatively, 51.9% of shares of all “Specialty Retail” companies are held by institutional investors. 52.9% of Penske Automotive Group shares are held by insiders. Comparatively, 20.5% of shares of all “Specialty Retail” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Penske Automotive Group beats its rivals on 8 of the 15 factors compared.

Penske Automotive Group Company Profile

Penske Automotive Group is an international automotive and commercial vehicle retailer. The company operates franchised dealerships that sell new and used vehicles, along with parts and maintenance, repair, financing and insurance services. Its automotive dealerships represent a range of manufacturers, with a focus on premium and luxury brands. Penske also operates commercial truck dealerships, which sell new and used trucks and provide parts and service to business customers. Founded by Roger Penske, the company serves customers primarily in the United States and also has operations in several international markets, including the United Kingdom, Germany, Italy, Australia and Japan.