Penske Automotive Stock (NYSE: PAG) Moves Green YTD with Bill Brown Ford Purchase

Penske Automotive Group stock (NYSE: PAG) is up 3.54%, close to $161 on a strong day. Having previously been red YTD before today's action, why is PAG up?

The bullish sentiment comes as the automotive giant announced a significant expansion with the acquisition of Bill Brown Ford in south-eastern Michigan.

Penske Automotive Group has made a notable addition to its portfolio with the recent purchase of Bill Brown Ford, located in the densely populated area of Livonia, Michigan. This strategic move is projected to boost the company's revenue significantly, with an estimated annualized revenue increment of $550 million.

With this acquisition, Penske Automotive will take control of over 200,000 square feet of existing dealership facilities spanning across 29 acres. The sizable addition includes a primary dealership building, a used vehicle facility, a commercial fleet maintenance centre, and a collision repair shop.

Analyzing Penske Automotive's Current Market Standing

Penske Automotive, headquartered in Bloomfield Hills, Michigan, functions within the Consumer Cyclical sector and is a prominent player in the Auto & Truck Dealerships industry. The company oversees a varied range of transportation services, including automotive and commercial truck dealerships worldwide.

With an established market capitalization of approximately $10.7billion, Penske Automotive trades in a 52-week range from $137.95 to $180.04. This current price level positions the stock near the midpoint of its 52-week range, demonstrating steadiness in the often volatile market landscape.

Financially, Penske Automotive presents a trailing P/E ratio of 10.79 and forecasts a forward P/E ratio of 11.14. The company has declared a dividend rate of $3.34 with a dividend yield of 2.15% and a conservative payout ratio of 21.11%. Its robust revenue of $29.64 billion and net income attributable to common stockholders of $970 million fleshes out the company's healthy financial stature.

Ownership of the company's stock is heavily dominated by institutional investors, accounting for around 77.97%, with insiders holding 21.07% of the shares. As per the latest statistics, Penske Automotive's outstanding shares number approximately 66.88 million, with 18.50 million shares in the float. Analysts have set a mean price target of $166.43 on the stock, alongside a hold recommendation with a mean score of 2.9 from five analyst opinions.

The acquisition of Bill Brown Ford is a substantial step for Penske Automotive as it expands its reach in a key market. The consolidation not only augments the company's revenue stream but also fortifies its presence in Michigan, which is home to the largest county by population in the state.