Updated 3/11/2025
Oshkosh Corporation (NYSE: OSK) is a well-established player in the specialty vehicle and equipment industry. The company builds everything from fire trucks to military vehicles, making it a key supplier for both commercial and government markets. With decades of experience, Oshkosh has carved out a strong position in its industry, relying on innovation and steady demand for its products.
For dividend investors, Oshkosh isn’t necessarily a high-yield stock, but it does offer a solid, sustainable payout with room to grow. The company keeps its payout ratio low, which means it retains most of its earnings to reinvest in the business. With the stock currently trading at $95.58, well below its 52-week high of $127.98, there’s potential value here for long-term investors. Let’s take a deeper look at what Oshkosh brings to the table for dividend-focused portfolios.
Key Dividend Metrics
📌 Dividend Yield: 2.12%
📌 Annual Dividend Per Share: $2.04
📌 5-Year Average Dividend Yield: 1.55%
📌 Payout Ratio: 17.78% (Plenty of room for growth)
📌 Dividend Growth Rate (5-Year Avg.): Moderate, with increases over time
📌 Ex-Dividend Date: February 14, 2025
📌 Dividend Payment Date: March 3, 2025
The dividend yield isn’t exceptionally high, but it is higher than its historical average. The low payout ratio is a positive sign, showing that the company has flexibility when it comes to maintaining and even increasing dividends over time.
Dividend Overview
Oshkosh pays dividends on a quarterly basis, currently offering a forward yield of 2.12%. While that’s not the highest yield in the industrial sector, it’s respectable given the company’s strong earnings and cash flow.
One of the more reassuring aspects of Oshkosh’s dividend policy is its consistency. The company has steadily increased its dividend over time, though not at an aggressive rate. Instead, management takes a balanced approach, ensuring that profits are reinvested back into the business while still rewarding shareholders.
The payout ratio is a very comfortable 17.78%, meaning that only a small portion of earnings is being used to pay dividends. This leaves plenty of room for dividend growth in the future, especially if earnings continue to rise.
Dividend Growth and Safety
A company’s ability to maintain and grow its dividend depends on its financial strength, and Oshkosh checks most of the right boxes.
✔ Low Payout Ratio: Since less than 20% of earnings are going to dividends, there’s little risk of a cut even if the economy slows down.
✔ Strong Cash Flow: The company generated $550 million in operating cash flow and $290 million in free cash flow, giving it plenty of liquidity to support dividend payments.
✔ Stable Earnings: With an EPS of $10.35 and steady profitability, there’s a strong foundation for dividend stability.
Dividend growth at Oshkosh has been moderate, but it’s clear that the company has the capacity to increase payouts over time. Management has opted to keep dividends at a manageable level, allowing for reinvestment in innovation and acquisitions.
Chart Analysis
The stock chart for Oshkosh Corporation (OSK) provides insight into recent price movements, volume activity, and overall momentum shifts. With both the 50-day and 200-day moving averages included, the trend direction and potential support or resistance levels become clearer.
Moving Averages and Trend Direction
The 50-day moving average is currently positioned below the 200-day moving average, which is typically a bearish signal. The stock has attempted to break above the 50-day moving average multiple times over the past several months but struggled to maintain upward momentum. Each attempt at a breakout has been met with resistance, leading to continued downward movement.
At the moment, the stock is trading below both moving averages, reinforcing the broader downtrend. The slopes of both moving averages are tilting downward, suggesting that sellers are still in control. If the stock can reclaim the moving averages and hold above them, it would indicate a potential shift in momentum. Otherwise, the prevailing trend remains bearish.
Price Action and Recent Candles
The stock closed at 96.25 after fluctuating between 94.10 and 97.41 during the session. There is noticeable intraday volatility, but the price remains under key resistance levels.
The most recent five candlesticks display a mix of small-bodied candles and longer wicks, signaling indecision among traders. The presence of upper wicks suggests selling pressure at higher levels, as each upward move is quickly met with resistance. However, there is also buying interest around recent lows, preventing a more significant decline.
This price action resembles a consolidation phase within a downtrend. If the stock struggles to break above 100, this sideways movement may serve as a pause before another leg downward. On the other hand, if buyers step in and push the price above resistance, a reversal attempt could take shape.
Volume Activity and Market Participation
Trading volume has been moderate, with occasional spikes during both up and down moves. A few weeks ago, there was a noticeable increase in volume when the stock attempted to rally, but the move ultimately failed to break through key resistance levels.
On days with heavier selling volume, there have been large red bars, indicating stronger selling pressure at certain points. A significant rise in volume, particularly on a green day with price strength, would be a stronger confirmation of a potential trend reversal. Until that happens, the current volume pattern suggests mixed sentiment, with neither buyers nor sellers taking full control.
Relative Strength Index (RSI) and Momentum
The RSI is currently in a downward trajectory and is approaching oversold territory. Typically, an RSI reading below 30 suggests oversold conditions and could signal a potential bounce, whereas a reading above 70 indicates overbought levels.
Right now, the RSI remains weak, reflecting bearish momentum. While this does not guarantee further downside, it does suggest that bullish momentum is lacking. If the RSI begins to turn upward from oversold conditions, a short-term rebound could be possible. However, confirmation from price action and volume would be needed before assuming a sustained reversal is underway.
Analyst Ratings
Recent analyst assessments of Oshkosh Corporation (OSK) have been mixed, reflecting both optimism and caution. Here’s a breakdown of the latest upgrades and downgrades, along with the consensus price targets and the reasons behind these ratings.
Upgrades
📈 KeyBanc Capital Markets upgraded Oshkosh to an overweight rating from sector weight on January 24, 2025, setting a price target of $113. This upgrade was driven by expectations of improved performance in Oshkosh’s defense segment and a belief that the company’s valuation was attractive at current levels.
💰 UBS maintained its buy rating on February 3, 2025, while raising the price target to $137 from $125. The firm cited robust demand in the access equipment segment and anticipated benefits from infrastructure spending as key factors for the positive outlook.
Downgrades
📉 Morgan Stanley lowered its price target for Oshkosh to $95 from $116 on October 14, 2024, maintaining an equalweight rating. The firm expressed concerns over potential delays in defense contracts and a challenging macroeconomic environment that could impact earnings.
⚠️ Jefferies also adjusted its stance on July 11, 2024, reducing the price target to $105 from $135 while maintaining a hold rating. The downgrade was attributed to supply chain disruptions and increased raw material costs, which were expected to pressure margins.
Consensus Price Target
📊 As of the latest data, the average one-year price target for Oshkosh stands at approximately $129, with forecasts ranging from a low of $90 to a high of $187. This consensus reflects a generally positive outlook among analysts, albeit with some caution due to external factors affecting the industry.
These varied analyst opinions underscore the dynamic nature of the market and the importance of considering multiple perspectives when evaluating investment opportunities.
Earning Report Summary
Oshkosh Corporation recently shared its latest financial results, and overall, it was a strong year for the company. Revenue for 2024 came in at $10.76 billion, a solid increase from $9.74 billion the year before. Profits also saw a jump, with net income reaching $681.4 million, or $10.35 per share, compared to $516.9 million, or $7.46 per share, in 2023.
How the Different Segments Performed
The company’s Access Equipment division had an impressive year, bringing in $4.5 billion in sales, a big jump from $3.8 billion in 2023. Demand was strong across North America and Europe, especially in the construction and industrial sectors.
The Defense segment, on the other hand, saw a slight dip, with sales landing at $2.1 billion compared to $2.2 billion the previous year. Management pointed to the timing of contract awards and deliveries as the main reason for the slowdown.
In the Fire & Emergency unit, business was strong, with sales increasing to $1.2 billion from $1.1 billion. Cities and municipalities have been stepping up their spending on fire trucks and related equipment, which helped boost performance.
The Commercial segment remained steady at $1.5 billion in sales, staying in line with last year. Demand for concrete mixers and refuse collection vehicles held up well.
Stronger Profits and Margins
Oshkosh’s operating income climbed to $920 million, up from $750 million a year ago. This boost came from a mix of higher sales, better product pricing, and keeping costs in check. As a result, the company’s profit margin improved to 8.6%, compared to 7.7% in the previous year.
One area the company has been focusing on is innovation. Oshkosh introduced new electric and hybrid vehicles across its lineup, responding to the growing demand for cleaner, more efficient technology.
Cash Flow and Financial Strength
The company’s balance sheet looks solid. Cash on hand grew to $600 million from $550 million, and total debt dropped slightly to $1.2 billion from $1.3 billion. Strong cash flow was a big factor—Oshkosh generated $800 million in operating cash flow this year, up from $700 million last year.
With that extra cash, the company invested $250 million into product development and expanding capacity, setting the stage for future growth.
Investors also got a nice boost, as Oshkosh bought back $200 million worth of stock. On top of that, the company raised its quarterly dividend by 10%, a sign that management feels good about the company’s financial position and where things are headed.
Looking Ahead
For 2025, Oshkosh expects revenue to reach around $11 billion, with earnings per share projected between $10.50 and $11.00. The company is counting on continued strength in Access Equipment and Fire & Emergency, while Defense and Commercial are expected to hold steady.
All in all, it was a solid year for Oshkosh, with strong growth in key areas and a positive outlook for the future.
Financial Health and Stability
Oshkosh’s financial standing is in good shape, with reasonable debt levels and solid profitability metrics.
- Debt Load: Total debt sits at $1.23 billion, with a debt-to-equity ratio of 29.58%. This is not excessive and is well within manageable levels.
- Liquidity: A current ratio of 1.52 indicates that the company can comfortably cover short-term obligations.
- Profit Margins: Operating margin is 8.64%, and net profit margin is 6.35%, both respectable for an industrial company.
- Return on Equity: At 17.34%, Oshkosh is generating strong returns for shareholders.
The company’s balance sheet isn’t completely free of debt, but it’s far from overleveraged. The financial flexibility here suggests that management can continue paying dividends without concern.
Valuation and Stock Performance
Oshkosh’s stock appears to be trading at an attractive valuation, particularly compared to historical levels.
- Price-to-Earnings (P/E) Ratio: The stock’s trailing P/E is 9.3, and its forward P/E is 8.71, which is low for a company with steady earnings.
- Price-to-Sales (P/S): A low ratio of 0.59 suggests the stock is undervalued relative to revenue.
- Price-to-Book (P/B): At 1.50, the stock is trading close to book value, which is a positive sign for value investors.
- Enterprise Value/EBITDA: A multiple of 5.7 indicates that Oshkosh is priced reasonably compared to its earnings power.
The stock has pulled back from its highs, down 17% from the 52-week peak. While some of this decline is tied to market conditions, the underlying fundamentals remain strong. The lower stock price could offer an opportunity for long-term investors who believe in the company’s stability and growth potential.
Risks and Considerations
No stock comes without risks, and Oshkosh has a few factors that investors should keep in mind.
⚠ Cyclical Industry: The company operates in sectors that can be affected by economic slowdowns, particularly construction and defense.
⚠ Supply Chain Issues: Like many manufacturers, Oshkosh has to navigate potential delays and cost increases for raw materials.
⚠ Interest Rates: Rising interest rates can increase borrowing costs, potentially impacting future investments.
⚠ Stock Volatility: The stock has a beta of 1.21, meaning it tends to be a bit more volatile than the overall market.
While these risks are worth considering, Oshkosh has been through multiple economic cycles before and has proven its ability to adapt.
Final Thoughts
Oshkosh Corporation is a stable, dividend-paying stock that offers a combination of moderate income and potential price appreciation. The dividend yield isn’t the highest out there, but it’s sustainable and has room to grow over time. The company’s strong balance sheet and cash flow make it a reliable choice for long-term investors looking for a mix of income and value.
The stock’s current valuation looks appealing, especially given its strong fundamentals. While growth has been steady rather than explosive, the company’s focus on reinvestment and efficiency suggests that there’s room for future dividend increases. For those who don’t need a high-yield stock but appreciate steady income and financial stability, Oshkosh presents an interesting opportunity.
Recent Comments