Group 1 Automotive

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Small-cap auto dealer Group 1 Automotive ( GPI) operates 129 auto franchises at 100 dealerships in the US and the UK. The firm also owns 22 collision service centers stateside. While auto sales have been under significant pressure in the last few years, investors' fears have largely been unfounded. Selling cars may be a capital-intense business, but the most financially vulnerable dealerships closed their doors during the depths of the 2008 financial crisis.

Now, with credit flowing more freely once again, dealers like Group 1 are seeing a return to normalcy in their financial performance. Group 1's sales are already approaching their pre-recession highs.

While car sales aren't a dying business, they're also not a growth business here in the U.S. To combat that, Group 1 is another stock that's been pushing abroad. The company already holds a significant presence in the UK, but now, a bigger push to Europe could spell growth for Group 1. Domestically, a focus on selling higher-margin products (like service contracts for used cars) should spur some top-line growth in the near-term.

Last week's 18% dividend hike brings Group 1's dividend payout to 13 cents per share each quarter, a 1.27% yield at current prices.

To see these dividend plays in action, check out the Dividend Stocks for the Week portfolio on Stockpickr.

And if you haven't already done so, join Stockpickr today to create your own dividend portfolio.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

-- Written by Jonas Elmerraji in Baltimore.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, based out of Baltimore, is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.

If you liked this article you might like

Auto Industry's Running Out of Gas and Analyst Suggests Government Support May Be Down the Road

Analysts' Actions -- Arista Networks, CF Industries, Duke Energy, FireEye and More

Auto Retailers With U.K. Interests Get Clobbered Following 'Brexit' Vote

CarMax Results Show Expectations Still Too High for Auto Dealers

CarMax Results Show Expectations Still Too High for Auto Dealers

Auto Industry Has Many Levers to Pull if Federal Reserve Lifts Interest Rates