The year is 1933. Kiichiro Toyoda has traveled Europe and the United States to learn more about automobiles. Soon after, the Toyoda textile company, founded by Kiichiro's father Sakichi Toyoda, founded an automobile department. Four years later, with logo already in place, the Toyota Motors company went into business.
Since then, the Japanese manufacturer has not stopped making vehicles, and their products improve every year. The proof? Of the thirty companies listed on the Eco30, Toyota is the most solid company to pick if an investor wants to put together a global portfolio from scratch.
With the high likelihood that Toyota will increase in value over the next year and its attractive PE ratio, we issue a strong buy recommendation. Analysts price the stock at 7,704.95 yen on average, and at this valuation the stock is poised to jump 30%.
Based on its PE ratio, Toyota is on the same level with the French company Axa. Both companies are trading at nine times their profits. Still, being the cheapest company on the Eco30 is no small feat, and even better when experts covering the industry forecast that your net earnings will hit an all-time high at the end of 2014.
Dividend at all-time high
Last year, Toyota registered a significant increase in its margins, making 60% in profits or around 13.4 billion euros.
Market consensus from FactSet shows that the company will not skip a beat and should make 14.58 billion euros this year. We'll have to wait until Toyota publicizes its annual earnings in May to know whether the company can match analyst expectations. Until then, analysts will keep their bets on the Japanese auto maker and hope that it continues to grow well into 2015, perhaps topping 16 billion euros per year in revenues.
As for its corporate debt, this should remain stable at around 82 billion euros this year and drop 30% to 58 billion euros in 2015.
One of Toyota's most attractive features is its dividend. This year it is expected to reach an historic high as the dividend per share goes up 14% to 187.41 yen, which is a 3% return on investment.
