Paccar Lets the Good Times Roll With Its Parts Business
Paccar is incredibly well-managed, with margins and returns that are superior to its peers. This owes primarily to its premium product offering and strong number-two position in North America. Paccar justifies its pricing power by offering customers higher-quality and more fuel-efficient products that reduce their total cost of ownership. Management maintains a fortress balance sheet with a near $10 billion cash hoard, no debt, and a conservatively capitalized finance subsidiary. This allows Paccar to always be well invested and achieve impressive milestones such as 86 consecutive years of profitability and paying a dividend every year since the 1940s. While some could call the balance sheet somewhat “lazy,” this approach has clearly contributed to the company’s strong performance through the ups and downs of the truck cycle.
United States