Goodyear is the better buy right now

Article Excerpt

GOODYEAR TIRE & RUBBER CO. $19.53 (Nasdaq symbol GT; TSINetwork Rating: Average) (330-796-2122; www.goodyear.com; Shares outstanding: 233.0 million; Market cap: $4.4 billion; Dividend yield: 3.3%) is one of the world’s largest tire makers. It has 47 production plants in 21 countries. For the three months ended September 30, 2018, the company earned $163 million, or $0.68 a share, excluding one-time items. That’s a drop of 7.9%, from $177 million, or $0.70, a year earlier. The earnings decline was partly due to slowing vehicle sales in China. Higher raw material costs also contributed. Revenue rose just slightly, to $3.93 billion from $3.92 billion. While Goodyear sold fewer tires overall, it sold more high-profit-margin premium tires. The company faces a number of near-term challenges. They include rising raw material costs, a stronger U.S. dollar, which cuts the contribution of its foreign sales, and a further softening of market conditions in China. Still, the long-term outlook for Goodyear is positive. Demand for replacement tires should rise given a U.S. vehicle fleet…

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