HOG Stock and Dividend: What to Know

Key Points

  • Harley Davidson is a dividend stock with a long and rich history. 
  • The payments can be erratic but sound management has kept the balance sheet in good shape. 
  • A move into electric motorcycles could be the trigger for new growth. 

HOG stock

Looking for information about Harley Davidson and HOG stock dividend? Harley Davidson is an iconic brand with a regular dividend payment that you might want to pop into your portfolio. 

By the time you reach the end of this article, you will know what you need to make an informed decision. The takeaway is that Harley Davidson has weathered many storms and always comes out in better shape. Today's Harley Davidson is as strong as ever and on track to resume growth. 

Harley Davidson Overview

Harley Davidson was founded in 1903 by two friends with a dream. Their dream began with a desire to power an uncomplicated bicycle and turned into what is now one of the world's largest motorcycle manufacturers. The company's designs inspired a revolution in motorcycle styling built around customization. Harley riders can take advantage of factory-made, licensed and after-market parts that open the door to unlimited personal choice. 

The company got off to a swift start, primarily aided by World War I. The company sold thousands of motorcycles to the US government and launched the business to worldwide fame. By the mid-1920s, it was the world's largest motorcycle manufacturer, but soon the Depression would change that. After the Depression, Harley Davidson was one of only two motorcycle manufacturers to survive. In the time since, it has seen its share of troubles. 

AMF bought Harley Davidson in 1969 in a move that was supposed to improve operations. What resulted was among the worst periods of the company's life and included a reputation for low-quality bikes. Things changed for the company again in 1981 when a group of investors bought it and got it back on the right track. Their focus on quality and the company's legacy styling helped to create the company that it is today. 

Harley Davidson is among the world's most iconic brands and has sales worldwide. Revenue took a hit during the pandemic but bounced back strongly in 2022 with the aid of the company's Hardwire turnaround plan. That plan included the launch and spin-off of Livewire, an EV motorcycle manufacturer, of which Harley Davidson retains the controlling share. 

Harley Davidson Dividend Safety 

Harley Davidson stock dividends pay out a low percentage of earnings in 2023 — so low that the company could easily continue to pay the dividend even if the business were to shrink, and it's not shrinking. The balance sheet is also safe, with a low level of debt and high coverage. Cash reserves are also ample and will help sustain the business through its transition and shift back into growth. 

Why buy dividend stocks? One reason is possible future dividend increases that will catalyze price action in the stock. 

Harley Davidson Yield Attractiveness 

The HOG dividend yields about 1.35% in early 2023, which is in line with the broad market. The yield is on the low side for some investors but is a safe payout that could grow in the coming years. The company's turnaround is almost complete, so that will stop weighing on results. Livewire should reach profitability soon. In this light, the company might continue to increase its payment as it has been doing since the cut during the pandemic. The company cut the distribution during the pandemic to save capital and preserve the balance sheet, which is the silver lining. Dividend investing vs growth investing comes down to income versus capital gains; for income strategies to work, the payments need to be reliable. 

Harley Davidson Analyst Ratings 

Harley Davidson's analyst consensus rating fell from a "buy" to a firm "hold" when the COVID bubble burst, but this is as good as a buy for those who don't own the stock. However, the consensus price target in early 2023 had the stock trading in overvalued territory, but the trend in the target was upward. 

Harley Davidson Credit Ratings

Harley Davidson's credit rating fell in the wake of the pandemic on concern the business would flag. The takeaway is that the rating fell from an average AAA to a BBB+, which is still investment grade and has been stable since the cut. Assuming the global recovery continues and there are no more COVID-like hiccups, the credit agencies may become a tailwind for this market. 

Harley Davidson Value Comparison

HOG stock price appears like a value play trading at roughly ten times its earnings, but this may be a trap for value seekers hoping for a multiple expansion. Harley Davidson peers all trade in the same range, so it would take an industry-affecting change in fundamentals to achieve this goal. The good news is that investors interested in Harley Davidson and its dividend can get into it at a relatively low cost. One possible catalyst that could increase the multiple would be an increase in the dividend payment to pre-pandemic levels. 

Harley Davidson Dividend History

Harley Davidson began paying a dividend in 1990 and has paid a dividend every quarter since. The company also has a track record of dividend increases, but it is marred by two distribution cuts, one in 2009 when the financial crisis struck and the other in 2020 when the COVID pandemic struck. The takeaway is the company has maintained a fortress balance sheet in that time, so there is a trade-off. Harley Davidson is far from a Dividend Aristocrat and may never be a Dividend King stock

Harley Davidson Competitors

Harley Davidson has multiple competitors in the motorcycle space; some even have name recognition and brand loyalty, if different from the exact scope of business. The largest are Yamaha and Honda Motor Company, which have been building motorcycles for decades. Beyond that, the motorcycle market is highly fractured and filled with niche players that command some market shares. Among these are Polaris (Indian Motorcycles) and Triumph; only Polaris is publicly traded. 

Dividend Capture Strategy for HOG Stock

The Dividend Capture Strategy for HOG stock is simple in concept but often difficult to understand and execute because of the timing involved. The strategy revolves around a single key date called the ex-dividend date and how it affects dividend eligibility. Learning how to invest in dividend stocks like HOG is much simpler. 

What does it take to receive a dividend? But what day do you have to own it and how long do you have to own it? Those are important questions, and the answers are simple. You have to own it the day before the ex-dividend date and own it for only a single day. 

The confusing part is the day of record. The day of record is the day after the ex-dividend date but it's the date that counts because the date getting "recorded" is the day before the ex-dividend date. 

The ex-dividend date is the first day a stock will trade without the value of a declared dividend. Here's how it works: 

The company issues a press release and SEC filing that states it will pay a dividend. This release will include the amount, the day it will be paid and, more importantly, the ex-dividend date and the date of record. 

The date of record is a formality that lets you know which day the records of who owns the stock will take. What matters is the ex-dividend date. If this is the first day the stock trades without the value of the dividend, the day before the last day that it trades with the value. Any shareholder at the end of trading on the day before the ex-dividend date will be recorded as eligible on the date of record. 

How Do You Receive a HOG Dividend?

Receiving the dividend is easy. Assuming that you owned the stock the day before the ex-dividend day and held it until the next day before you sold it, you are eligible to receive the upcoming dividend. In this case, all you have to do is wait for the distribution, which will be paid into the same account you hold the stock. 

Future of HOG Stock and Dividends

The future of HOG stock looks bright in early 2023. The company has been working on a turnaround strategy for years that includes restructuring, expansion and a push into the EV market. The Livewire segment got off to a great start in 2022 and is expected to grow by quadruple digits in the first few years of its life. In this light, the company should be able to sustain the current dividend indefinitely and it may even increase it as well. There are pros and cons of dividends stocks, to be sure, but if the pros outweigh the cons they are usually a good buy. 

Harley Davidson: A Cyclical Dividend Payer 

Harley Davidson has a history of dividends and dividend growth but one that also includes dividend cuts as well. The takeaway for investors is that Harley Davidson pays a dividend, and it may grow. The risk is that it may one day get cut again, so there is a bit of risk on the horizon. 

FAQs

Find answers to frequently asked questions about Harley Davidson in this section. 

Does Harley Davidson pay dividends?

Harley Davidson pays dividends quarterly. The company has paid a dividend since the early 1990s and has a history of dividend increases. 

Does Harley Davidson have sufficient earnings to cover its dividend?

Harley Davidson has sufficient earnings to cover its dividend. The dividend payout ratio is very low and comes with a strong balance sheet, low debt and ample debt coverage. 

Is Harley Davidson a strong value stock?

Harley Davidson is a strong value stock. The company is effecting a turnaround that includes a shift into EV motorcycles that could open the door to real growth. 

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Companies Mentioned in This Article:

CompanyCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Harley-Davidson (HOG)$37.93-2.3%1.82%7.87Moderate Buy$46.67
Thomas Hughes

About Thomas Hughes

Experience

Thomas Hughes has been a contributing writer for DividendStocks.com since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 

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