Two Automobile Stocks To Watch: Toyota Motor Corp. (NYSE:TM), Gentex Corp. (NASDAQ:GNTX)

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By Chris Hillman on August 11, 2014 Consumer Staples

The auto industry is on a rise; it added 0.42 percent in the GDP figures of the second quarter of 2014. These figures are far better when compared with the performance of the last 3 years: the performance was +0.01 percent in the years 2012 and 2013 and -0.52 percent in the year prior.

The sales figures in the United States Automaker industry have shown quite an impressive growth over the last couple of months. The sales of Light Vehicles went up by 4 percent and reached to 8.17 million units during the first part of the year 2014. Sales, when adjusted for seasonal variations, came to a total of 16.8 million annual units.

The major automaker companies posted promising sales numbers for the second quarter of the year 2014: the figures of General Motors (NYSE:GM) were up by 13 percent whereas Ford Motors Co. (NYSE:F) saw a yearly increase of 3 percent in its sales figures. Similarly, other automaker companies, including Fiat (F.MI), Toyota Motors Co. (NYSE:TM) and Nissan Motors Co. Ltd (7201.Tokyo) saw huge increases in their second quarter’s financial reports.

The reason why the automaker industry is on a rise can be explained by the incentives that the auto-vehicle companies are giving to their customers in order to expand their sales figures. The increase in the demand of vehicles has in turn caused the demand of the auto parts to rise even further. The demand of auto parts has also increased due to the replacement of higher age United States vehicles that are still on road.
Two Auto Stocks are particularly on a rise this year.

Toyota Motor Corp. (NYSE:TM) operates its business in three of the market sectors: finance, automobiles and a segment that focuses on communications and housing sectors. The company’s first fiscal quarter’s earnings of 2015 reached to $3.64, beating the Zacks estimates of $3.07.

Moreover, Toyota Motor Corp. (NYSE:TM) reported a net income of $5.76 billion for its first fiscal quarter of 2015. The income was reported to be at $5.68 billion for the same quarter a year ago.

The company currently holds a #2 rank of Zacks, with a rating of ‘buy’ on its stocks. The price to earnings ratio of the company is at 9.8, which makes its stocks even more attractive. The company’s shares have gained around 7 percent in the last 3 months and chances are that the prices will soar even further.

Gentex Corp. (NASDAQ:GNTX) is known for providing rearview mirrors with auto-dimming and other advanced electronic functions. The company recently posted its adjusted earnings of 48 cents for the second quarter of the year 2014, increasing from 36 cents earnings of the first quarter; the figures were in line with Zacks predictions.

Coming to the Net income of the company, the income rose by 47 percent and reached to $76.7 million. Gentex Corp. (NASDAQ:GNTX) predicts the sales figures to surge 15 to 20 percent on yearly basis. Moreover, the company expects its gross profit margin to reach to approximately 39.5 to 40 percent.

Gentex Corp. (NASDAQ:GNTX) currently holds a #2 Zacks rank on its stocks due to its impressive price to earnings ratio of 14.67 and a dividend yield of 2.24 percent.