Penske Automotive Hikes Dividend

Penske Automotive Group, Inc. PAG revealed its Board has approved an increase in the cash dividend to $0.27 per share for the first quarter of 2016. Earlier, it paid a dividend of $0.26 a share and before that $0.25 a share.

According to the company's President, Robert Kurnick, Jr., said, "The increase in the dividend reflects the strength in the performance of the company's business in the first quarter and further demonstrates our commitment to return capital to PAG's shareholders."

Penske Automotive said the dividend would be payable on June 1 and fixed the record date of May 16 to determine the eligible shareholders.

The current dividend provided a yield of 2.8 percent while the payout ratio was 27 percent, which was higher than the average payout ratio of 23 percent for the five-year period. The company has been boosting its dividend rate in the last four years. As a result, its dividend growth rate for the three-year period was 25.25 percent.

Shares of the company traded down by 1.22 percent on Wednesday.