These two Japanese automakers reported higher U.S. sales in 2013, thanks to new models and pent-up demand after the 2008-2009 recession. Meanwhile, the low Japanese yen is increasing the value of their overseas sales. TOYOTA MOTOR CO. ADRs (New York symbol TM; www.toyota.com) is the world’s biggest carmaker by sales. It also makes industrial equipment, such as forklifts and prefabricated housing. Like most automakers, the company offers vehicle loans through its financing division. In 2013, Toyota sold 2.24 million cars and trucks in the U.S., up 7.4% from 2.08 million in 2012. That’s partly due to strong demand for its hybrid cars, which use gasoline and electricity. The company has sold 6.1 million of these vehicles since it started offering them in 1997. Toyota now sells 24 hybrid car models and one plug-in version in over 80 countries. Over the next two years, it plans to launch 15 new hybrids. It has a 50 per cent share of this market. The company’s $1.99 dividend yields 1.7%.
Honda taps into rising motorcycle demand in Asia
HONDA MOTOR CO. LTD. ADRs (New York symbol HMC; www.honda.com) is Japan’s second largest carmaker and the world’s biggest motorcycle manufacturer. In 2013, the company sold 1.53 million cars and trucks in the U.S., up 7.2% from 1.42 million in 2012. Honda continues to see strong demand for its Civic compact and Accord sedan. As well, it sold over 300,000 of its CR-V sport utility vehicles for the first time in its history. The company recently launched new motorcycle models in fast-growing markets like India and Indonesia. (Asia accounts for 87% of Honda’s worldwide motorcycle sales.) It is now making and selling motorcycles in Bangladesh. Honda sold 4.25 million motorcycles in the three months ended December 31, 2013, up 11.4% from 3.8 million a year earlier. The company’s $0.83 dividend yields 2.3%. In the latest edition of Wall Street Stock Forecaster, we examine Toyota’s earnings outlook and assess the prospects for increasing sales of hybrid cars. We also look at Honda’s earnings forecast for 2014 and whether motorcycle sales can continue to accelerate in Asia. We conclude with our clear buy-hold-sell advice on this stock. (Note: If you are a current subscriber to Wall Street Stock Forecaster, please click here to view Pat’s recommendation. Be sure to log in first.) If you’re a member of Pat’s Inner Circle and you’d like to ask a question about today’s article, please go to the question page reserved for you (be sure you’re logged in first). Click here to ask your question. COMMENTS PLEASE—Share your investment experience and opinions with fellow TSINetwork.ca members When you buy ADRs, or foreign stocks, do you prefer companies that have an established presence here, like Japanese automakers or Korean electronics firms? Have you had any big winners with foreign stocks that are not widely known or sold in North America?
