Why Garmin Stock Soared This Week
Key Points
Garmin grew sales and earnings per share by 17% and 16% in Q4, and its guidance exceeded analysts' consensus.
This sales growth was wide-ranging for Garmin, as each of its five business segments grew.
Garmin also announced a 17% dividend increase, keeping it one of the market's steadiest dividend-growth stocks.
Shares of GPS-focused technology behemoth Garmin (NYSE: GRMN) rose 11% this week as of 2 p.m. ET on Thursday following the company's excellent fourth-quarter earnings release on Wednesday. Sales and earnings per share rose 17% and 16% in Q4, rocketing past Wall Street's expectations. Similarly, management's guidance for 9% sales and EPS growth in 2026 also exceeded analysts' consensus, further driving the stock higher this week.
Garmin: A well-rounded dividend-growth stock
Perhaps the main reason the market loved Garmin's 2025 results so much is that the growth was companywide. Each of Garmin's five business segments delivered positive sales growth in 2025:
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- Fitness ($2.4 billion in sales) up 33%
- Outdoor ($2.1 billion in sales) up 5%
- Marine ($1.2 billion in sales) up 10%
- Aviation ($1 billion in sales) up 13%
- Auto OEM ($0.7 billion in sales) up 9%
Image source: Getty Images.
Just as important as this companywide sales growth, however, Garmin increased operating income by 19%, demonstrating its ability to grow without sacrificing margins. Continuously innovating, Garmin received five CES 2026 Innovation Awards for its technology. My favorite technological development from Garmin's Q4 release was the first-ever use of the company's Autoland system, which is a fully autonomous (pilot-free) landing backup in emergencies. An aircraft in Colorado experienced a rapid depressurization event, prompting the Autoland system to activate and land the plane safely at the nearest airport. While a tiny portion of Garmin's wide-ranging operations, stories like these show the company's technological heft in a world of rapidly developing artificial intelligence.
Powered by its double-digit sales growth and expanding margins, Garmin announced it would raise its dividend by 17% in 2026 -- its eighth straight year of increases. Home to negligible debt, this well-funded 1.5% dividend yield, and a consistently strong return on invested capital of 20% thanks to the company's successful innovation track record, Garmin makes for an excellent dividend-growth stock for investors seeking stability. Trading at 28 times earnings, Garmin isn't cheap, but its technological prowess and product diversification make it worthy of a premium in my eyes.
Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Garmin. The Motley Fool has a disclosure policy.