Goodyear Tire is rolling again
After a long, hard slog, the tire maker's turnaround is so secure that it has finally reinstated a dividend.
Over the last decade or so, practically anything that could go wrong for the Akron, Ohio, tire company has gone wrong. The industry's top business has shuttered factories, laid off workers and watched its share price plunge to an all-time low. But Goodyear has managed to put the bad times behind it.
As The Wall Street Journal noted, the company has shifted away from making low-end tires that generate slim profits in favor of more complex and lucrative ones. The results have been dramatic. About 75% of Goodyear's tires currently sell for about $130 each. Six years ago, about 40% of its tires fetched about $60.
Investors who stuck by Goodyear have been rewarded. Its shares have surged more than 60% this year. And on Friday, the company said it would again pay a quarterly dividend this year for the first time in 2002. In the financial world, that's a geological age between payouts. It also announced plans for a $100 million stock repurchase.
Goodyear has plenty going for it. Auto sales have been on a torrid pace this year as consumers who held off replacing their cars during the Great Recession headed to showrooms. These sales may ebb toward year-end, given that economic growth remains lackluster. Goodyear's good times, though, may keep on rolling.
Although its shares are already above Wall Street's average 52-week price target of $18.67, several analysts have recently raised their targets to between $21 and $24. Several firms, including Deutsche Bank, Argus and Citibank, have "buy" ratings on the shares.
Plus, that new dividend only adds to the luster of an already attractive stock.
Still, there’s no rush to grab Goodyear now because the good news is largely factored into the stock price. The shares trade at a price-to-earnings ratio of about 18, which is a premium to automakers GM and Ford. Investors should wait for a pullback before adding the stock to their portfolio.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr and at Berr's World.
No problems with Goodyear's in the past...
But now making it "a priority to buy only" American Made tires..
You have to spend a little more, but worth it.
And you have to go up to a mid range tire..
Recently bought 2 sets for 2 cars of Cooper's tires...Mid-range, made in U.S.
You can do the same with Goodyear.
Buying Union! How to be sure you're buying USW-made tires. The two symbols (either two letters or a letter and a number) which follow “DOT” indicate the company and the plant where a tire was manufactured.
|USW Local Union No.|
|BE||B. F. Goodrich, Tuscaloosa, AL |
|BF||B. F. Goodrich, Woodburn, IN |
|AN||B. F. Goodrich, Opelika, AL |
|VE/YE/YU/8B||Bridgestone/Firestone, Des Moines, IA |
|2M/3M||Bridgestone/Firestone, Bloomington, IL |
|D2/E3/W1/Y7||Bridgestone/Firestone, Lavergne, TN |
|2C/4D/5D||Bridgestone/Firestone, Morrison, TN |
|UP||Cooper, Findlay, OH||207L|
|UT||Cooper, Texarkana, AR||752L|
|DY||Denman, Warren, OH |
|DA||Dunlop, Buffalo, NY |
|JJ/MD/PU||Goodyear, Gadsden, AL||12L|
|JN/MJ/PY||Goodyear, Topeka, KS||307L|
|JE/MC/PT||Goodyear, Danville, VA||831L|
|JT/MK/TA||Goodyear, Union City, TN||878L|
|JP/MP/PL||Kelly-Springfield, Tyler, TX |
|JF/MM/PJ||Kelly-Springfield, Fayetteville, NC |
|CC||Yokohama Tire, Salem, VA |
Does anybody know where the new rubber capital of the world is?It isn`t Akron,oh anymore.
it must be some other country.
The Goodyear tires I’ve had recent experience with on new (Rental) cars generally give a very poor ride. Tires offered on new cars meet OEM quality standards and are the best tires made by that particular company. Tires that don’t meet OEM specifications are a lesser quality and are usually sold on the Retail market.
On one of my personal vehicles was purchased with Goodyear tires and it had a terrible ride until I finally replace the Goodyear tires with aftermarket Michelin tires. The Michelin tires made such a difference that it was hard to believe I was driving the same truck.
The next time you’re in a rental and experience a rough ride, look at the tires and I’ll bet they will be Goodyear.
Do not buy GM bonds, they ripped off thousands of bond investors, on there last bankruptcy filing, got pennies on the dollar.
The US Gov. in the last GM bailout, awarded the lucky slobs, who worked at GM, a better package, than the people that actually had money invested in GM bonds.
Copyright © 2014 Microsoft. All rights reserved.
Stocks are facing some serious resistance as the bears tear into the market's respite.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.