American Motorcycle Dealer AMD 234 January 2019 | Page 7

HARLEY-DAVIDSON
TOTAL ANNUAL
DIVIDENDS
Quarter
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
Dividend
1.48
1.46
1.40
1.24
1.10
0.84
0.62
0.475
0.40
0.40
1.29
1.06
0.81
0.625
0.405
0.195
0.135
0.115
1.0975
0.0875
0.0775
1.0675
0.055
Harley is returning a 4.3% yield -
paying out around 40% of its
earnings in the form of dividends.
income expressed as a factor of the
number of outstanding shares) shows
that the company remains profitable
and,
arguably,
theoretically,
increasingly so. The $0.68 EPS was a
massive 70 percent up on the third
quarter of 2017, with Q3 revenue
having been driven up by increased
shipments - which Harley claims to
have done while still managing
inventory carefully - compared to Q3
there were 2,200 fewer unsold bikes in
showrooms as the quarter closed.
Overall, third quarter domestic U.S.
motorcycle retail was -9.8 percent,
whereas Harley was down -13.3
percent (at 36,200 units from 41,800
for Q3 2017). Harley’s 601+cc new
model retail market share, which had
been holding up quite well through Q3
2017 (53.1 percent and growing)
dipped by 2.2 points to 50.9 percent for
the third quarter, with YTD market
share also down at 49.7 percent from
50.7 percent for the year-ago quarter.
While international sales are up (in
most markets, but especially in Europe
in volume terms), the fact that CFO
John Olin was able to point to the Q3
results being “in line with our plans”
doesn’t bode well. There will come a
point where investors may run out of
patience, especially if portfolio returns
are being squeezed elsewhere if the 9-
year Bull Run has now ended.
According to analyst blogs, there is
widespread concern that, with its focus
being on units, investor sentiment
could turn and that Harley’s focus on
being in the top quartile of S&P 500
shareholder returns may prove
insufficient to keep the share price
where Harley needs it to be. The sharks
could be about to start swimming in
ever decreasing circles.
TOP 10 HARLEY INVESTORS *
Investor
* As of 12/12/2018. Source: The Motley Fool Total Value Percentage
($ m)
Held
Vanguard Group Inc 634.80
10.82
Blackrock Inc 389.36
6.64
Dodge & Cox 351.82
6.00
Massachusetts Financial Services Co 283.28
4.83
INVESCO Ltd 281.47
4.80
State Street Corp 259.10
4.42
Bank of New York Mellon Corp 254.54
4.32
Capital Research Global Investors 200.49
3.42
Barclays Global Investors UK Holdings 198.80
3.39
Select Equity Group 3.04
178.39
88 percent of shares are held by institutional investors;
nearly 52% held by the ten largest.
AMERICAN MOTORCYCLE DEALER - JANUARY 2019
7