Here is the company’s news release.

The corporation has also been in the middle of international trade matters. President Reagan protected it during struggles with Japanese competition in the 1980s. Under the Trump administration, tariffs on foreign steel have driven up supply costs while retaliation against our motorcycles by foreign governments, such as the European Union, have resulted in other issues. If we have a new president elected this November, there could be a reorientation toward free trade, and therefore cause to think some things can improve for the business.

There are reasons to be wary of a stock’s dividend as a reason for ownership, or its dividend yield as a metric in support of investment. Little effort is required to divide the annual distribution by the share price. However, a stock can tank in a matter of days, as HOG has done recently. In fact, on the most recent ex-dividend date, the first day it trades without the right to a quarterly $0.38 / share payment, on Wednesday, March, 4th, HOG stock had closed at $30.10. Today, Tuesday, 3/11/20, it is closed near multi-year lows at $25.28. An investor who owns the shares for one year gets a payment of ($0.38 * 4 ) / $25.28  = 6.01%.

If you measure the firm’s reported operating income, accounting for both interest payments and consistent capital expenditures, the company is not adequately supporting both its dividend payments and share repurchases. Thus, sustainability of its payments to shareholders is questionable. Ideally the company would stop buying back stock before suspending, reducing, or eliminating the dividend.

Also, even if the company only earns $2.85 / share, when the analyst consensus is $2.97, it would still trade at a single digit p/e multiple, very cheap.

There is reason to suspect that several other entities would be interested in acquiring Harley-Davidson. The brand, which enables products to retail at high a price point, is definitely worth a great deal. The company’s debt, a condition that worsens as it borrows to reward stockholders, would not be attractive to some private equity firms. They are not the only potential buyers though.

In future months, Harley-Davidson should be announcing a permanent CEO. He or she will need to navigate a bumpy road ahead. There also is the possibility of an improved backdrop pertaining to trade-related issues if someone different is elected president in November. Both the dividend and share repurchase activity are not currently sustainable. Other than that, shareholders should make 6% annually if the stock’s price just stays the same and it is remarkably inexpensive while trading at lower prices than it has in years.

The author owns HOG stock.

3/20/20 as indicated on the Market Crash post, there is the possibility that Harley-Davidson will close down its facilities, as Ford and General Motors reportedly have. Thus, even though HOG shares are far beneath $25.28, there may not be any support for them until there is clarity on relevant issues.

For what it is worth, actual motorcyclists may choose to go for a ride amid a covid-19 shutdown, which is a tendency that could be underestimated or overlooked by professional investors.

Problems include the facts that no one can buy a new motorcycle if they are not being produced and dealerships are closed. Intuition says that dealerships might be able to sell existing inventory, though.

10/27/20 HOG is up this morning, about 26%, to trade at $36.74 on quarterly results. It is still ahead of the election. A concern is that there is not a solution to persistent problems, a recall of the years-in-the-making Livewire being indicative. Thus, stock is being unloaded even though an anticipated Democratic victory may improve sentiment because of tariff issues.