PACCAR Raises Quarterly Dividend 6.1%, Extends 15-Year Streak

PACCAR Inc increased its quarterly dividend to $0.35 per share from $0.33, a 6.1% raise. The first payment at the new rate traded ex-dividend on May 13, 2026, and the next ex-dividend date is November 11, 2026. The annual dividend per share is $1.40.

Why the dividend changed

The board’s announcement did not identify a single financial measure that triggered the increase. It emphasized PACCAR’s long record of profitability and shareholder returns, while Chief Executive Preston Feight attributed the company’s performance to fuel-efficient Kenworth, Peterbilt and DAF trucks and the transportation services supplied by PACCAR Parts and PACCAR Financial Services. This was a regular dividend increase, not an adjustment related to a split, merger or spinoff. PACCAR’s dividend announcement provides the company’s full explanation.

The increase accompanied first-quarter results that showed a mixed but improving operating picture. Revenue was $6.78 billion, down from $7.44 billion a year earlier, while net income was $605.3 million, compared with $505.1 million in the prior-year period, which included a litigation charge. Cash provided by operations was $971.8 million. Management said stronger demand was expanding the production backlog and credited PACCAR Parts, Financial Services and growth in the truck businesses for the sequential improvement. The first-quarter release details those results.

Results reported after the increase reinforced that operating context. Second-quarter net income rose 24% from the preceding quarter to $752.0 million, and cash generated from operations was $700.8 million. PACCAR Parts produced record quarterly revenue of $1.75 billion. Management said truck build rates increased because of strong orders and improved freight rates. PACCAR’s second-quarter results support that assessment.

Dividend track record

PACCAR paid $0.33 quarterly through the February 11, 2026 ex-dividend date, then paid $0.35 for the May 13 and August 12 ex-dividend dates. The company has increased its regular dividend for 15 consecutive years, and its 5-year annualized dividend growth rate is 9.1%. The last annual cut occurred in 2010.

Annual totals show why PACCAR’s dividend record requires attention to extra distributions as well as the regular quarterly rate. Total payments increased 43.4% to $1.89 in 2021, increased 47.5% to $2.79 in 2022 and increased 51.8% to $4.24 in 2023. They then fell 1.7% to $4.17 in 2024 and fell 34.8% to $2.72 in 2025. Each year included 5 payments, and 2025 included a $1.40 year-end payment with a December 19, 2025 ex-dividend date. Variability in those extra payments can reduce the annual total even while the regular quarterly dividend continues to rise.

Is the dividend covered?

The dividend consumes 28% of earnings. That payout ratio indicates substantial earnings coverage because only a minority of profit is required for the regular distribution, leaving room for operations, investment and other capital needs.

SmarterDividends rates the dividend A with a safety score of 85. That falls within the “very safe” range of 80-100, meaning the regular payment appears well supported under current financial conditions. The grade does not imply that future extra dividends will remain constant.

Yield and valuation

At a share price of $111.73, PACCAR’s forward yield is 1.25%. That is below the Industrials sector median forward yield of 1.61%. The comparison identifies PACCAR as a lower-yielding income holding than the median company in its sector, despite its long growth record.

SmarterDividends estimates fair value at $118.77 and assigns the shares a fair valuation verdict. The estimate represents 2% upside to fair value. That modest gap indicates that the valuation assessment depends more on the current operating outlook and dividend growth than on a large discount in the share price.

What to watch

The next concrete dividend milestone is the November 11, 2026 ex-dividend date. Investors can also monitor whether the $0.35 regular rate is accompanied by another year-end extra payment, which has had a material effect on PACCAR’s annual dividend totals.

The next earnings update will provide evidence on truck orders, production, freight conditions and cash generation. PACCAR projected capital spending of $700 million to $750 million and research and development expense of $450 million to $480 million for 2026. Its latest Form 10-Q identifies industry sales, tariffs, fuel costs, used-truck prices and Financial Services volumes among the risks relevant to future earnings and dividend coverage.