By Ben Matone
Harley-Davidson, Inc., through its subsidiaries,
produces heavyweight motorcycles, motorcycle
parts, and related accessories principally in the
United States and internationally. It operates in
two segments, Motorcycles and Related Products
and Financial Services.
The Company itself, is over 100 years old, and
continues to appeal to the market of “inherent
attitude,” leading the motorcycle Industry and is
one of America's premier iconic brands.
Industry (Recreational Vehicles)
The recreational vehicle (RV) manufacturing
industry in the US consists of about 800
companies with combined annual revenue of $12
The industry is highly concentrated: the five
largest manufacturers hold more than 60 percent
of the market.
Industry growth during the last decade has come
from increasing volume in the United States
where unit sales have seen 13.7% compounded
annual growth since 1998.
Industry Competitors vs. HOG
Market Profit Div Long
P/E ROE D/E
Cap Margin Yield Term D/E
Industry (RVs) 23.0B 17.8 7.2 23.3 0.4 1.78 0.38
HOG 16.0B 17.1 16.5 34.7 0.35 1.4 0.35
HMC 118.97B 22.21 6.15 16.54 0.827 1 -
PII 1.6B 13.54 5.2 38.73 0.26 3.1 0.26
Performance of Harley Davidson
P/E: 17.10 Yield:1.40%
Beta : 1.05
2005 EPS $3.41
2006 EPS $3.79
est. 2007 EPS $4.16
D/E : .349
2005 Sales: $5,673.8 (mil)
1 yr. NI growth: 7.8%
(Chart to the right compares
Harley-Davidson to the 2
major competitors, Honda
(HMC) and Polaris Industries
The company has
maintained a pretty
steady sales and
earnings growth increase
over last 5 years.
Saw a 12% rise in
motorcycles sales in the
3rd quarter of 2005.
52wk Range: $44.40-
The company had a Gross Profit increase of $143,398 (value
in thousands) over the 2004-2005 fiscal year.
9/14/06- Board of Directors approved a cash dividend of
$0.21 per share for the third quarter of 2006. The dividend
is payable October 13, 2006 to the holders of record of the
Company's common stock on October 3, 2006.
6/06 - Harley-Davidson appoints Beijing Feng Huo Lun
(FHL) as the first authorized Harley-Davidson dealer on
8/28/06- Harley-Davidson said it is establishing an entity
called New Castalloy as a wholly owned manufacturing
operation that is expected to employ about 300 people at
the site in North Plympton, Adelaide, South Australia;
(Harley-Davidson said it expects to close the transaction
toward the end of September).
HOLD (5 Main points)*
1.) The company has an estimated growth of
14.6% for the current quarter with a 9.5% for next
2.) The company pays a solid dividend, has a
rabidly loyal customer base, and sports a return on
assets of nearly 18%.
3.) The Company has a time-tested brand, great
margins, and strong free cash flow
4.) Had a current sales growth of 10.3% this year
5.) Earnings Growth this year 11.1%
* on a side note Thomson Financial viewed it as a very strong
hold (ranked 14).