Proof of success came in the financial results reported yesterday. They were unspectacular but solid. Revenue, measured in yen, was up almost 15%, and net income, measured in the same currency, was up 81%.
The company projected 13% sales growth for the full year, and net income estimates were raised another 13%. The company is benefiting from a weaker yen, which increases the value of dollar earnings. Like many Japanese companies, its fiscal year starts in April.
Conservative investors like this company. The stock is up almost 38% so far this year, dropping the yield on its $1.26/share dividend to 1.55%. The gain is better than Ford, which is up 32%, and GM, up almost 29%. The price-to-earnings ratio multiple has slipped slightly as other car companies have recovered, and it's now 16.28.
Investors may still prefer Ford, which despite its rise still has a a below-market P/E of 11.25. But if you stayed in Toyota throughout this recovery, despite its relatively-steep valuation, your patience has been rewarded.
In the name of full disclosure, I've been a happy Toyota owner for more than 20 years. I raised my kids in a Previa van, my daughter drives my old Corolla, and my favorite car of all time is the Toyota Scion xB.
But I've never owned Toyota stock. So I did some background research on the Toyota story for this article. It has been a wild ride.