Japanese carmakers prepared for a rebound

Article Excerpt

Car sales will likely remain depressed for the next few months as the industry recovers from the COVID-19 pandemic. As sales rebound, Toyota and Honda should outpace many of their competitors thanks to their current cost-cutting plans. Those savings should support their current dividend rates. TOYOTA MOTOR CO. ADRs $127 is a buy. The stock (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.4 billion; Market cap: $177.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.toyota.com) gives you exposure to the world’s largest automaker. Due to COVID-19, Toyota’s sales fell 6.5% in its fiscal 2020 fourth quarter, ended March 31, 2020, to 2.13 million vehicles. All of the company’s main markets contributed to the decline: Japan sales were down 7.6%; North America dropped 8.3%; Europe fell 3.7%; and Asia (excluding Japan) fell 9.8%. However, sales improved 1.6% in other regions. Overall revenue in the quarter also declined 7.6%, to $65.1 billion from $70.5 billion a year earlier…