PAG (Penske Automotive Group Inc) vs S&P 500 Comparison

PAG

S&P 500

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PAG

S&P 500

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PAG

S&P 500

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Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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S&P 500

PAG

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KMX

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Penske Automotive Group Inc
Glance View

Economic Moat

None

Market Cap

10.2B USD

Industry

Retail

Penske Automotive Group Inc., a name synonymous with automotive excellence, operates a sprawling network of retail automotive dealerships across the world. Founded by the legendary automotive entrepreneur Roger Penske, the company has grown to become one of the largest and most diversified automotive retailers in the world. At its core, Penske Automotive excels through its strategic acquisition model, buying and managing high-performance car dealerships primarily across the United States, the United Kingdom, and Australia. This model allows Penske to leverage economies of scale, benefit from geographic diversification, and sharpen operational efficiencies. Each dealership is equipped to provide a comprehensive range of services that cater to every consumer need, from new and pre-owned vehicle sales to offering parts and services that ensure each vehicle continues to perform at its peak. The magic in Penske's financial model lies in its ability to diversify revenue streams within the dealership. The direct sale of vehicles, both new and certified pre-owned, forms the bedrock of their revenue. However, the company deftly amplifies profitability by cultivating a robust parts and service business, providing essential maintenance and repairs that ensure customer loyalty long after the initial sale. Additionally, Penske enhances its financial performance through its finance and insurance (F&I) offerings, which include vehicle warranties, insurance products, and leasing agreements that add high-margin revenue. This combination of diversified revenue avenues not only shields the company against market volatility but also drives consistent growth, reinforcing its status as a leader in the automotive retail sector.

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PAG Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

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PAG

vs

S&P 500

Stocks Performance
PAG vs S&P 500

Performance Gap
PAG vs S&P 500

Performance By Year
PAG vs S&P 500

Competitors Performance
Penske Automotive Group Inc vs Peers

Penske Automotive Group Inc
Glance View

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PAG vs S&P 500

Stocks Performance PAG vs S&P 500

Performance Gap PAG vs S&P 500

Performance By Year PAG vs S&P 500

Competitors Performance Penske Automotive Group Inc vs Peers

Penske Automotive Group Inc Glance View

Company

Help

Tools

Stocks

PAG

vs

S&P 500

Stocks Performance
PAG vs S&P 500

Performance Gap
PAG vs S&P 500

Performance By Year
PAG vs S&P 500

Competitors Performance
Penske Automotive Group Inc vs Peers

Penske Automotive Group Inc
Glance View