HOG Fundamental Research Investment Analysis, Harley-Davidson, Inc.

Sign Up Now for Ockham Investment Research, Ratings, Financial News, and In-Depth Reports

Harley-Davidson, Incorporated (HOG)

The Razor's Edge

2-Year Price History

Recent Price
(2/6/2009)
$14.42
52-Week Price
$10.07 - $48.05
Market Capitalization
$3.4 Billion
Dividend Yield
9.20%
Most Recent Dividend
$1.29

About Harley-Davidson, Inc.

Harley-Davidson, Incorporated is considered to operate in the Consumer Goods sector. They specifically operate in the Recreational Vehicles business segment contained within the Automotive industry.

The Company operates in two segments: the Motorcycles & Related Products segment and the Financial Services segment. Its reportable segments are strategic business units that offer different products and services.

Ockham's Rating

Rating specific information requires Premium Access.
Buy Now or Take the Tour.

HOG Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, HOG the high and low end of the Price to Sales per share ratios are 2.39x and 1.45x respectively.

Notice that HOG's current Price to Sales per share ratio is 0.60x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $14.42, HOG is 69% below where we would expect to see it. This will beneficially factor into our final analysis of HOG as it is not often that this stock sinks to these levels.

HOG Cash Earnings

Looking at HOG specifically in their Cash Earnings capabilities, Ockham views HOG as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for HOG, the current level of Cash Earnings compared to its historical levels helps identify where HOG is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 12.01 and a historical low Cash Earnings per share ratio of 7.20, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for HOG? From the Ockham perspective, we are looking specifically at HOG to see if the market is recognizing the huge disparity between HOG's past stock price to Cash Earnings ratio to today's levels. At a difference of 69% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at HOG. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

HOG Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from HOG against the historic high and low levels over an available data range. Because HOG has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In HOG’s case, the estimated annual dividend is $1.32 producing a current dividend yield of 9.15%. The highest dividend yield from HOG in recent history was 13.11% while the lowest dividend yield was 0.20%. It's hard not to notice that HOG pays a current dividend yield that is 37.49% above the historical median. This peaks our interest since our analysis is looks favorably upon dividend yields that are greater than the historical median.

Peer Comparison

:

Harley-Davidson, Inc. Industry Grouping

(2/6/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding HOG) 1.91 1.37 » 10.37 0.14 0.10 » 0.66 9.15% 9.46%
*10 year range does not include current year values
Ford Motor Company F $4.6 Billion $1.94 0.32 0.19 » 4.60 0.03 0.02 » 0.37 1.08% 9.79%
Magna International, Inc. Class A Sub.Vtg MGA $3.5 Billion $30.87 3.27 2.54 » 9.14 0.13 0.10 » 0.60 15.98% 9.74%
Harley-Davidson, Inc. HOG $3.4 Billion $14.42 3.04 2.60 » 31.84 0.60 0.50 » 5.26 6.96% 32.30%
Borg Warner Inc. BWA $2.4 Billion $21.05 3.57 1.85 » 11.12 0.37 0.29 » 1.15 14.30% 13.28%
Navistar International Corp. NAV $2.3 Billion $32.40 2.21 2.13 » 19.41 0.16 0.10 » 0.46 15.00% 9.32%
General Motors Corp. GM $1.7 Billion $2.84 0.18 0.14 » 7.61 0.01 0.01 » 0.73 -0.61% 5.18%
Ockham Ratings & Analysis Report
1 Month Report Access
Harley-Davidson, Inc. (HOG)
+ >5500 securities and ADR's
proceed to
...or Learn More about
Premium Ockham
powered by Psydex

RazorWire™ & Community Discussion

Fast Money
2/6/2009 5:46 PM
Fast Money
>> the studios got crushed. Ka pitch la toir selling, huge volume day, closed up today. You might want to take a look. >> hogs now, HARLEY-DAVIDSON up 28% on the week, zekes. >> i'm having a hard time picturing warren buffett on a that's my issue here. The stock popped when he I want to see him drive downtown
Fast Money
2/4/2009 5:52 PM
Fast Money
That would be a character change. I tell you what, warren buffett has not bought one share of common stock you can buy along what he did yesterday was HARLEY-DAVIDSON at 15% and parent company goldman sachs for money that amounted to more -- >> as soon as he buy it is stock you can buy it, you will be I will listen to him. >> he bought the spiders.
Countdown to the Closing Bell
2/4/2009 3:02 PM
Countdown to the Closing Bell
Figure out how to pay back the money that they've borrowed in the tarp program so it's very some other names that we've been watching here, stocks to watch, HARLEY DAVIDSON, berkshire hathaway helping out HARLEY-DAVIDSON today. Down 7%, kraft, disney, dow under pressure all day long and gm mirage, yesterday a downgrade and today, we saw wynn getting a
Fast Money
2/3/2009 5:43 PM
Fast Money
They don't have chips anymore, they don't have $3. Billion because they lost it this quarter and now they're in the handset market, I love the chicago-based company, but I don't like the stock. >> HARLEY-DAVIDSON beaten for some time, and 16% the move, the other way. Higher. >> they got a loan from warren
Countdown to the Closing Bell
2/3/2009 3:56 PM
Countdown to the Closing Bell
Number four, merck, up, a ton of volume in mefrjt better than expected fourth quarter earnings and gave in-line guidance and 13 cents better, the stock was up 7%, number 6 HARLEY DAVIDSON. After profits down 58% last year, they couldn't sell their fat boy. I'm dying for a fat boy. Warren buffett comes in rode to
Fox Business
1/23/2009 2:01 PM
Fox Business
They reported areaings down 19%. They thought they may have to cut the difficult defend. Of course they will. But the company is just not doing what people expect it to look at HARLEY-DAVIDSON. This could be a microcosm of the high luxury end products, everyone loves to buy or maybe just chicks like me, they are having the same issues everybody
The Opening Bell on Fox Business
1/23/2009 9:31 AM
The Opening Bell on Fox Business
America, now down 7%. At that look at the numbers quickly and advanced micro, been talking about plummeting pc demand and hog, which is HARLEY-DAVIDSON to the down side fourth quarter, we've been watching the other names, pfizer and wyeth, quickly and wyeth, quicklyu, talking with jason weisberg talking about the fact that mergers are just so great, good for companies, good for wall
Squawk On The Street
1/23/2009 9:05 AM
Squawk On The Street
Down 11% year over year. That's a very noticeable drop for them. They're very concerned about bankruptcy reform issue that's going through the congress. HARLEY-DAVIDSON down 18% here. Rather noticeably, 13% in the they are closing some plants, laying off 1100 people. By the way, they are not providing any guidance for the rest of the year.
Money For Breakfast
1/23/2009 8:27 AM
Money For Breakfast
Jenna: good morning everybody breakfast" checking out some of the top news stories of the day. Announcements to tell you about this morning, and this morning we definitely heard some from HARLEY-DAVIDSON which says it is cutting about 1100 jobs. Oil services company schlumberger also out with its numbers and saying it will reduce its global workforce as however, it did not say by how
Money For Breakfast
1/23/2009 7:39 AM
Money For Breakfast
Speculation among wall street analysts that they perhaps want to sell or trying to sell this. What do you think is going to happen there? >> it is unclear, but something is certainly going to happen there was news earlier this month that the president of HARLEY-DAVIDSON financial services resigned effective immediately. Charles: when you say something, what do you mean by something? That they are going to spin it off, sell it, or what's going to
Money For Breakfast
1/23/2009 7:37 AM
Money For Breakfast
Of get in consumers at the bottom end and hopefully keep them in the brand for future charles: aaron it seems like you what do you think? >> no, I don't disagree. Actually HARLEY-DAVIDSON has been doing a lot of fairly creative and aggressive things to court new markets lately. They have really been paying attention to women and motorcycling and minorities and the youth market.
Money For Breakfast
1/23/2009 7:36 AM
Money For Breakfast
Same troubles with sub prime lending that some of the other bigger banks that are doing and because that's an in house financial service I think that has a potential to have a fairly big effect on HARLEY-DAVIDSON's charles: natalie, HARLEY-DAVIDSON's recent success has always been correlated to the baby boomers but eventually everyone knew that would have to change will the current circumstances make them have to change their business model a little bit and come out with
Money For Breakfast
1/23/2009 7:35 AM
Money For Breakfast
Now, let's go upstairs to connell mcshane up at the fox business desk and get updated on some earnings. Connell: we're watching a number one of the business alerts we're keeping on top of in addition to ge is HARLEY-DAVIDSON which came out this morning with a rough you might want to say harley is stalling with the motorcycle maker reporting a big drop in its fourth quarter numbers 60% drop year over year compared what they reported the same time
View All Harley-Davidson, Inc. Comments

Key Fundamentals

HOG - Harley-Davidson, Incorporated Fundamentals
Price (2/6/2009) $14.42
Volume (2/6/2009) 7.9 Million
10 Day Average Volume 9.0 Million
13 Week Price Range $10.07 - $21.74
52 Week Price Range $10.07 - $48.05
LTM Revenue $5.6 Billion
 
Shares Outstanding (12/2008) 232.8 Million
Market Capitalization $3.4 Billion
Shares Held By Institutions 205.4 Million
Institutional Holders 660
% Shares Held By Institutions 88.20%
Earnings Per Share (EPS) $2.79
P/E Ratio 5.20
Book Value Per Share $10.74
 
Gross Margin 38.00%
Quarterly Dividend 1.32
Dividend Yield 9.20%
Beta 1.77
Fiscal Year Ends December