PCAR, Paccar Inc
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is Truck Parts and Other (92%) and Financial Services (8%).
- What moves the needle
- How hard the assets work, and what the inputs cost. What decides it: utilization, how much of the capex merely keeps the assets running, and what a downturn does to a heavy fixed-cost base.
- Is it a good business?
- Return on capital has run high across the record (median 23%, above 15% in 7 of 10 years). Owner earnings agree: roughly 11% of revenue reaches owners as cash, consistently. High, durable returns can mark a moat, but whether this one is real pricing power or an accounting artifact is the judgment the 10-K is for.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Truck Parts And Other is 92% of revenue, so this is largely a single-line business.
- Truck Parts And Other92%$26.2B
- Financial Services8%$2.2B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $17.0B | $19.5B | $23.5B | $25.6B | $18.7B | $23.5B | $28.8B | $35.1B | $33.7B | $28.4B | $27.8B |
| Operating marginOp. mgn | 6.6% | 11.2% | 12.0% | 12.1% | 8.9% | 10.2% | 13.4% | 16.3% | 16.0% | 10.6% | 11.4% |
| Net incomeNet inc. | $522M | $1.7B | $2.2B | $2.4B | $1.3B | $1.9B | $3.0B | $4.6B | $4.2B | $2.4B | $2.5B |
| EPS (diluted)EPS | $0.99 | $3.16 | $4.16 | $4.58 | $2.50 | $3.57 | $5.75 | $8.76 | $7.90 | $4.51 | $4.69 |
| Owner earningsOwner earn. | $1.9B | $2.3B | $2.5B | $2.3B | $2.4B | $1.6B | $2.5B | $3.5B | $3.8B | $3.7B | $3.8B |
| ROICROIC | 12% | 29% | 43% | 25% | 12% | 16% | 23% | 29% | 24% | 12% | 15% |
| CapexCapex | $375M | $423M | $458M | $574M | $550M | $559M | $525M | $695M | $839M | $743M | $725M |
| Capex / revenueCapex/rev | 2.2% | 2.2% | 1.9% | 2.2% | 2.9% | 2.4% | 1.8% | 2.0% | 2.5% | 2.6% | 2.6% |
| Capex vs depreciationCapex/dep | 1.24× | 1.32× | 1.36× | 1.78× | 2.21× | 2.07× | 1.58× | 1.67× | 2.11× | 1.87× | 1.82× |
| Cash & investmentsCash+inv | $1.9B | $2.4B | $3.4B | — | — | — | — | — | — | — | $3.2B |
| Net debt / (cash)Net debt | ($1.9B) | ($2.4B) | ($3.4B) | — | — | — | — | — | — | — | ($3.2B) |
Owner’s Scorecard
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- Not enough data
The filing data didn't include the inputs for this check.
- Debt, net of cash +$3.4BNet cash, debt-freeCash $3.4B − debt $0
Cash and short-term investments exceed every dollar of debt by $3.4B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Not enough data
The filing data didn't include the inputs for this check.
Is it a good business?
- Not enough data
The filing data didn't include the inputs for this check.
- SolidOwner Earnings $3.7B = operating cash $4.4B − capex $743M
What an owner could take out without starving the business. That's 13% of revenue. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $4.4B ÷ net income $2.4B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns about halfDividends + buybacks $2.3B ÷ Owner Earnings $3.7B
Of $3.7B Owner Earnings, $2.3B (63%) went back to shareholders, $2.3B dividends, $36M buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.87×ExpandingCapex $743M ÷ depreciation $398M
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Operating margin 7% (FY2016) → 11% (FY2025)
Margins widened over the record, pricing power intact or improving.
- Owner earnings growth +7%/yr
Free cash to owners grew about 7% a year over the record.
- Worst year 2016 · 6.6% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $32.3B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.
- Reinvested$5.7B · 18%
- Dividends$12.4B · 38%
- Buybacks$625M · 2%
- Retained (debt / cash)$13.6B · 42%
It reinvested $5.7B (18%) back into the business and returned $13.0B (40%) to owners, $12.4B in dividends, $625M in buybacks.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio189:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
Graham’s defensive-investor test
4 of 4 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $28.4B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity —Current ratio ≥ 2× · —
Current assets / liabilities not in the data yet.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +154%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $4.51/share and book value $36.57/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Paccar Inc has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $3.8B on 527M diluted shares; net cash $3.2B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationMD&A
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“Had these accounts not been modified and continued to not make payments, the pro forma percentage of retail loan and lease accounts 30+ days past due would have been as follows: At December 31, 2025 2024 Pro forma percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada 2.1 % …”
From the recordRevenue exposed (TTM)$27.8B - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“A 10% decrease in used truck values worldwide, if expected to persist over the remaining maturities of the Company's operating leases, would reduce residual value estimates and result in the Company recording additional depreciation expense of approximately $31.5 million in 2026, $21.8 million in 20…”
From the recordBalance sheet (TTM)+$3.4B net cash, debt-free · no real interest burden - Litigation & contingenciesMD&A
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“Adjusted net income (non-GAAP), excluding a $264.5 million after-tax charge related to civil litigation in Europe, was $2.64 billion ($5.01 per diluted share).”
A judgment, not a number, weigh it against the filing yourself. - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“Average truck sales prices decreased sales by $306.2 million, primarily due to lower price realization in the U.S. and Canada and Europe, reflecting an increased competitive environment, partially offset by tariff price increases in the U.S.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “In 2024, the effect of exchange rate changes on cash decreased cash and cash equivalents by $151.4 million, reflecting a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the euro, Mexican peso and Brazilian real. 27 The Company expects to continue paying dividends, …”
- “The decrease in net cash used in investing activities primarily reflects lower net purchases of marketable securities of $628.2 million, lower originations of retail loans and finance leases of $551.8 million, lower net increase in wholesale receivables on equipment of $507.2 million and a decrease …”
- “PFS income before income taxes increased to $485.4 million in 2025 from $435.6 million in 2024, due to higher finance margins from a higher loan and finance lease portfolio, and higher operating lease margins from operating lease portfolio, partially offset by a higher provision for losses on receiv…”
- “Truck segment income before income taxes and pre-tax return on revenues decreased primarily due to lower truck unit deliveries in all major markets from lower retail demand, reflecting economic conditions as well as higher tariff costs resulting from current trade policies primarily in the U.S.”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Automakers
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| FFord Motor Co | $187.3B | 7% | -4.9% | -55% | 7% |
| GMGeneral Motors Company | $168.0B | 40% | 1.7% | 2% | 10% |
| TSLATesla, Inc. | $94.8B | 18% | 4.6% | 4% | 7% |
| PCARPaccar Inc | $28.4B | 20% | 10.6% | 15% | 13% |
| LEALear Corp | $23.3B | 6% | 3.3% | 9% | 2% |
| APTVAptiv PLC | $20.4B | 19% | 5.8% | 4% | 7% |
| BWABorgwarner Inc | $14.3B | 19% | 3.7% | 4% | 8% |
| RIVNRivian Automotive, Inc. / DE | $5.4B | 3% | -66.5% | -52% | -46% |