Canadian automakers reported 2.038 million new vehicle sales in 2017, the second consecutive year the industry saw record sales. Canada’s light-truck segment saw its market share jump by 8.7% year over year. Let’s look at two stocks that could be impacted by shifting trends in this industry in 2018.
AutoCanada Inc. (TSX:ACQ) stock was down 1.34% in early afternoon trading on January 4. Shares fell 7.2% in 2017 in spite of positive earnings buoyed by broader trends in the market.AutoCanada owns and operates automobile dealerships across Canada. The company released its third quarter results on November 9. New vehicle sales rose 9.4% to 12,014 and used vehicle sales increased 2.9% to 5,118.
The company announced a quarterly dividend of $0.10 per share representing a 1.7% dividend yield. With a cooldown expected for the Canadian economy, investors should be cautious with AutoCanada as a long-term play.
Magna International Inc. (TSX:MG)(NYSE:MGA) rose 1.17% in early afternoon trading on January 4. Shares climbed 17.6% in 2017. Magna is the largest automobile partsmanufacturer in North America. Even with NAFTA negotiations going south, Magna is in a solid position with almost 50% of its core business in the United States.
Magna saw third quarter sales increase 7% to $9.5 billion but net income was flat at $503 million. The stock also offered a quarterly dividend of $0.35 per share representing a 1.9% dividend yield. Magna recently made a larger investment in its Alabama facility that specializes in aluminum casting for light-vehicle production.