2 Car Stocks to Buy as Automotive Sales and Profits Boom

The automotive industry has been on the uptick over the past few years as sales growth and revenue continues to increase. The thriving industry has also undergone major changes with the likes of Tesla (TSLA) pushing innovation, causing many automakers to increase their offerings as a result.

The automotive boom is still in full swing, but there are short-term concerns that have kept stock prices from experiencing their full potential. Long-term growth into the next decade seems promising, with India and China being major markets for automotive companies.

These two stocks have outperformed the competition and deserve serious consideration for every portfolio.

1.     General Motors (GM)

General Motors started with a clean slate in 2009 following the company declaring bankruptcy. CEO Mary Barra has done extremely well in her position maintaining modest debt levels, increasing quality ratings and turning the company’s profits around.

Barra announced last year that the company aims to achieve profit margins (pretax) of 9% to 10%, up from 5.8% at the time. The increased profit margins are not expected until next decade, but the company’s strategy makes for a promising outlook.

GM has been advancing its electric car lineup and is working on self-driving systems.

The company also offers attractive dividend yields of 4.94%.

2.     Toyota (TM)

Ford may be picking up steam and reviving confidence in their brand, but Toyota still remains the world’s largest automaker. Toyota has been keeping up with the competition and leads the world in hybrid models.

Toyota is a safe stock with little surprises along the way and a dividend of 3.35%.

Modest, continual growth is what investors should expect from the stock. The company recently announced an 800 job cut from their Thailand unit. The company also made headlines when it teamed up with car riding service Uber, offering Uber a financing option for drivers.

GM invested $500 million in Uber competitor Lyft earlier in the year.

Both companies will supply self-driving vehicles to the respective ride sharing companies in future deals.