Ford Motor Company (F), General Motors Company (GM): Are Cars a Good Investment Again?

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Honda Motor Co Ltd (ADR) (NYSE:HMC)

Sales Growth 12-Month Growth P/E EPS Dividend Yield
7% 7.28% 18.74 2.09 2.21%

Not all the good news was from American automakers. Honda Motor Co Ltd (ADR) (NYSE:HMC) did pretty well, with it’s CR-V climbing the sales ladder. Again, that’s a small vehicle, but not as small as some. Honda Motor Co Ltd (ADR) (NYSE:HMC)’s been a rough investment to hold over the last twelve months as the shares haven’t kept pace with the S&P or the Dow. Still, there might be something worth hitting, there. I just think you’d be better off in one of the other two. But if – for some reason – you want to avoid them, Honda Motor Co Ltd (ADR) (NYSE:HMC) makes a good back up.

Not all good news

Toyota Motor Corporation (ADR) (NYSE:TM)

Sales Growth 12-Month Growth P/E EPS Dividend Yield
-1% 38.19% 22.80 4.99 1.31%

As one of only two major car companies to not see sales growth – the other was Volkswagen – Toyota Motor Corporation (ADR) (NYSE:TM) looks particularly bad in comparison. It’s true that the firm has had some bad PR lately, with several safety-oriented recalls making a lot of news, but still a lot of the raw numbers look good. EPS is good, 12-Month Growth is good. However, the growth has made the P/E for Toyota Motor Corporation (ADR) (NYSE:TM) look sort of wonky compared to the others on the list. I think Toyota Motor Corporation (ADR) (NYSE:TM) is slightly overvalued right now and it would be worth your time to avoid buying it. If you’re in, it’s time to sell and take what profit you can.

Cruising down the road…

Car companies aren’t something one has in a portfolio for sudden and explosive growth. These are mature firms in a well-developed industry. If you’re thinking about investing in any of these – and my top recco is Ford Motor Company (NYSE:F) – it should be with the thought that you want some large-scale manufacturing firms in your portfolio. They won’t be a main driver, but every portfolio needs solid, reliable growers to form the basis of it all. That’s why you should put some auto in your tank.

Good luck!

The article Are Cars a Good Investment Again? originally appeared on Fool.com and is written by Nate Wooley.

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