The facts
Autodata compiled the statistics on midsize vehicle sales in the United States. You’re no doubt familiar with the names, especially if you’ve watched one set of advertisements on TV.
Sitting at the top of the Autodata list is the Honda Accord. Honda got this number one spot by selling 33,538 of their flagship Accord in the month of April. The problem for the company is that this number is actually down some 3.1% when compared to the same month in 2008.
Toyota Motor Corporation (ADR) (NYSE:TM) is doing a lot worse than that. The company’s Camry was ranked number one in 2008, but unit sales have dropped by 20.8%, and the Ford Fusion is hot on the Camry’s tail.
When it comes to Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM), their vehicles have gained 77.4% and 28.8%, respectively.
If we jump outside of the realm of this article and look at the other midsize manufacturers, then it becomes apparent that General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) aren’t the only companies trying to chase down the Japanese firms. Kia is cutting the gap, and fast, with their Optima. The vehicle sold close to 15,000 units in April, that’s an astonishing 224% gain over 2008 figures.
Sell Toyota and Honda?
With both of these companies losing their midsize edge in the United States, could now be the time to hop off the bandwagon? I’m going to have to say no. These two companies are huge, and they’ll likely grow sales if the economy grows.
Both Honda Motor Co Ltd (ADR) (NYSE:HMC) and Toyota also pay dividends. You’ll find the largest one over at Honda where they pay 2.40%.
The expected growth at both companies is well above that of the overall market. If you’re a holder of Toyota stock, the analysts believe your company will grow at a rate of 47.5% over the next five years. I think you’ll struggle to find a company of this size with a growth rate like that.
Honda Motor Co Ltd (ADR) (NYSE:HMC) isn’t looking too bad either. The company has an expected growth rate of 27.6% over the next five years. That sort of growth along with the dividend that Honda pays should be enough to keep anyone happy.
The Americans!
Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have been around for a very long time. The two companies have had their ups and their downs throughout history. Despite the downs, they’re both here, and the both continue to battle across a variety of vehicle ranges.
Ford Motor Company (NYSE:F) is the only one of the two that actually pays a dividend, and it yields a solid 2.80%. There is, however, a mountain of debt that comes along with this company, and that is one big demerit when it comes to considering a purchase.
General Motors Company (NYSE:GM) actually has one very distinct advantage in that they took a bailout during the financial crisis. The bailout and restructuring of debt essentially gave General Motors Company (NYSE:GM) a very good clean slate with which to work from.
Analysts are incredibly bullish on the stock, and they believe that the company will manage a five-year growth rate of right around 12.4%.
Investor takeaway
All four of these companies are spectacular investments for the long-term. It doesn’t matter that the Japanese may have been experiencing some sales drops either.
I am bullish on the automotive business and firmly believe that any drops Honda and Toyota Motor Corporation (ADR) (NYSE:TM) have seen in the midsize range will be made back up over the coming years when Americans head back out to buy new cars, and when they start buying them more frequently.
The article Midsize Market Money Making: Auto Manufacturers originally appeared on Fool.com and is written by Ash Anderson.
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