HOUSTON - Group 1 Automotive, Inc. (NYSE: NYSE:GPI), a prominent automotive retailer, announced Thursday that its board of directors has approved a quarterly dividend of $0.47 per share. This declaration aligns with the company's previously stated 4% increase in its annualized dividend rate, which rose from $1.80 per share in 2023 to $1.88 per share for the current year.
Stockholders of record as of September 2, 2024, will be eligible for the dividend, which is scheduled for payment on September 16, 2024. The company's commitment to shareholder returns is reflected in the consistency of its dividend payments.
Group 1 Automotive operates a substantial network of 260 dealerships and 337 franchises across the United States and the United Kingdom, encompassing 45 collision centers. The company represents 35 automotive brands and provides a full range of services, including new and used vehicle sales, vehicle financing, service and insurance contracts, maintenance and repair services, and the sale of vehicle parts.
In other recent news, Group 1 Automotive, a prominent automotive retailer, has priced a $500 million private placement of senior unsecured notes with a 6.37% interest rate, due in 2030. The company intends to use the proceeds from this offering to repay existing borrowings under its revolving credit facility and for general corporate purposes. Amid economic uncertainty, the offering is a strategic decision aimed at strengthening the company's liquidity and supporting its ongoing business needs.
Group 1 Automotive also reported record revenues in new vehicle sales and finance & insurance for the second quarter of 2024, despite a cyberattack on CDK systems that impacted pre-tax income by an estimated $17 million. The company has expanded its operations by acquiring four Mercedes-Benz (OTC:MBGAF) dealerships and is expected to finalize the Inchcape (OTC:INCPY) acquisition in the next quarter, significantly increasing its UK market presence.
Analysts from the earnings call highlighted the profitability of Toyota (NYSE:TM)'s hybrid vehicles and improvement in EV gross margins, indicating a positive outlook for the company's future. However, the company expects most of the CDK cyberattack impact to be behind them, with no material impact anticipated for the next quarter. These developments reflect Group 1 Automotive's resilience in navigating substantial challenges and its commitment to growth and efficiency.
InvestingPro Insights
Group 1 Automotive, Inc. (NYSE: GPI) has demonstrated a commitment to shareholder returns, not only through the recent increase in its dividend but also by maintaining dividend payments for an impressive 15 consecutive years, as noted in one of the InvestingPro Tips. This consistency is a positive signal for investors looking for stable income streams. Moreover, the company has managed to raise its dividend for 3 consecutive years, showcasing its ability to grow shareholder value over time.
InvestingPro Data further reveals that Group 1 Automotive has a market capitalization of $4.55 billion, with a P/E ratio that is currently attractive at 8.55, suggesting that the stock could be undervalued compared to earnings. Additionally, the company has experienced an 8.46% revenue growth over the last twelve months as of Q2 2024, indicating a robust financial performance in a competitive automotive market.
Another InvestingPro Tip highlights that analysts have revised their earnings upwards for the upcoming period, which may signal confidence in the company's future performance. This is particularly relevant for investors considering the strength of Group 1 Automotive's fundamentals.
For those interested in more detailed analysis and additional InvestingPro Tips, there are 11 more tips available for Group 1 Automotive at https://www.investing.com/pro/GPI, which could provide further insights into the company's financial health and market position.
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