The last 12 months have been exciting times for the auto industry. Self-driving and autonomous cars are the newest sensations, with rumors on delivery, capability and market share infiltration setting the market abuzz.
Over the last 12 months, luxury car demand lifted Ferrari's (RACE - Get Report) shares by more than 57%. General Motors' (GM - Get Report) investors have gained seen an 18% return. Tesla (TSLA - Get Report) shares rose 20% in that period, and Honda Motor (HMC - Get Report) shares added 10%.
Bill Ford and CEO Mark Fields were initially viewed as opponents, but that stance has changed since Ford canceled the construction of a plant in Mexico. The border tax issue still hangs over Ford's head, plus, Ford's China business could also be negatively impacted by Trump who's not one to mince words about the Asian giant's trade policies.
Remember, reduced tax breaks have created problems for Ford in China.
Given that the automobile business is low-margin, automakers never enjoy huge valuations. Earnings growth has been sedated and will probably remain as such.
Ford, which grew earnings per share (EPS) by 5.6% annually over the last decade, is expected to increase earnings by 2.9% over the next 5 years. GM's numbers are a tad worse, projected to decline nearly 5% annually over the same period.
If companies like Nissan (NSANY) and Toyota (TM - Get Report) are expected to show growth over the long-term, Ford with its impressive vehicle portfolio, attractive line-up and focus on innovation, will eventually surge ahead.
By comparison, companies like General Motors, Toyota, Honda, and Ferrari have lower dividend yields at present.
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