Lithia Motors Raises Quarterly Dividend 7.1% to $0.75

Lithia Motors raised its quarterly dividend 7.1% to $0.75 per share from $0.70. The next ex-dividend date is November 6, 2026, and the payment date is November 20, 2026, putting the new annual dividend at $3.00 per share.

Why the dividend changed

Lithia’s board approved the higher payment in connection with third-quarter results. The company did not give a separate formula for the increase, but the decision followed stronger reported earnings, record quarterly revenue and continued investment in its dealership and financing operations. It was not presented as a split, merger, spin-off or special-dividend adjustment.

Third-quarter revenue rose 3% to $9.9 billion, while diluted earnings per share increased 54% to $13.22. Adjusted earnings per share increased 9% to $10.34. Lithia also reported stronger used-vehicle profitability, wider aftersales margins and 69% growth in Financing Operations income. Chief Executive Bryan DeBoer said the company’s cash generation and balance-sheet flexibility supported its capital decisions. Lithia’s third-quarter release provides the results and management commentary.

The dividend is one part of a broader capital-allocation program. Lithia repurchased $85 million of shares during the quarter and ended it with approximately $1.4 billion in cash, marketable securities and available revolving credit. Management said its priorities remain growing the dealership network and adjacent businesses while allocating capital with discipline. The company did not provide numerical earnings guidance in the release.

Lithia also continued reshaping its dealership portfolio. It acquired two stores and divested two during the quarter, then added two Hyundai and two Kia stores in Memphis in October. The Memphis businesses are expected by the company to contribute $250 million of annualized revenue. Those investments compete with dividends and repurchases for capital, making operating cash generation and balance-sheet capacity central to future distribution decisions.

Dividend track record

The increase extends Lithia’s dividend-growth streak to 15 consecutive years. The last annual cut occurred in 2008, placing the current run well beyond the disruption that accompanied the financial crisis and auto-industry downturn.

Recent payments show that growth has accelerated within 2026. The quarterly amount moved from $0.55 on the March 6 ex-dividend date to $0.57 on May 8 and $0.70 on August 7 before the new $0.75 rate. The five-year dividend-growth rate is 12.5% annual growth.

Full-year totals show a steadier long-term progression. Annual dividends increased from $1.22 in 2020 to $1.36 in 2021, $1.61 in 2022 and $1.92 in 2023. Growth then moderated, with totals of $2.09 in 2024 and $2.18 in 2025. The annual increase slowed from 19.3% in 2023 to 8.9% in 2024 and 4.3% in 2025, although the successive increases during 2026 indicate a renewed step-up in the quarterly rate.

Is the dividend covered?

The dividend consumes 7% of earnings, indicating substantial earnings coverage. That low payout leaves most reported profit available for acquisitions, debt management, repurchases and reinvestment in dealerships and financing operations.

SmarterDividends rates the dividend B, with a safety score of 78. That places it in the safe range of 66-79. In plain terms, the combination of the low earnings payout and established growth record suggests limited immediate pressure on the distribution, although the grade is not a guarantee against a future reduction.

Yield and valuation

At a share price of $290.73, Lithia’s forward yield is 1.05%. That is below the Consumer Cyclical sector median forward yield of 2.54%, so the shares provide less current dividend income than the sector midpoint despite the latest increase. The company has a market value of $6.4 billion and a one-year price return recorded as a 7.3% loss.

SmarterDividends estimates fair value at $905.75 and classifies the shares as undervalued, representing 206% upside to fair value. That estimate is a valuation-model result and is separate from the dividend’s yield and coverage.

What to watch

The immediate dates are November 6, 2026, when the shares are scheduled to trade ex-dividend, and November 20, 2026, when the payment is scheduled. The company’s Form 8-K confirms the board authorization and payment terms.

The next operating update will show whether used-vehicle profitability, aftersales margins and Financing Operations continue supporting earnings coverage. Investors can also monitor the integration of the Memphis dealerships and Lithia’s balance among acquisitions, repurchases and dividends. Approximately $535 million remained under the share-repurchase authorization at the end of the third quarter, leaving another significant claim on capital alongside the higher quarterly payment.