Daily Stock Pick: Goodyear Tire

A portfolio of stocks I've been building since September 3, 2019, named Volio, will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!

Today I'm reviewing the fifth of five consumer cyclical sector stocks this week striving to join my Volio folio. This could be my thirty-third pick for Volio!

That consumer cyclical sector includes includes twenty-eight industries ranging from Advertising Agencies to Apparel, Autos, Broadcasting, Department Stores, Gambling, Leisure, Lodging, Packaging, Personal Services, Shoes, Restaurants, Rubber, Plastics, Textiles, and all such consumer aimed enterprises.

Goodyear | Goodyear Tires Sign, 9/2014 by Mike Mozart of The… | Flickr

My subject today is another auto parts company, this one named, Goodyear Tire & Rubber Co. Its trading ticker symbol is GT.This is my first ever report on Goodyear Tire & Rubber Co.  

Goodyear Tire & Rubber Co manufactures and sells a variety of rubber tires under the Goodyear brand name.

The firm's tires are used for automobiles, trucks, buses, aircraft, motorcycles, mining equipment, farm equipment, and industrial equipment.

The company operates its business through three operating segments representing its regional tire businesses: Americas; Europe, the Middle East and Africa (EMEA); and the Asia Pacific.

It operates approximately 1,000 retail outlets, which offer products for retail sale, and provides repair and other services.

The company sells its products worldwide through a network of independent dealers, regional distributors, retail outlets, and retailers.

The Goodyear Tire & Rubber Company was founded in 1898 and is headquartered in Akron, Ohio.

I use three key data points to gauge dividend equities or funds like Goodyear Tire & Rubber Co:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not.

Those three basic keys, however, best tell whether a company has made, is making, and will make money.

GT Price

Goodyear's price per share closed at $6.74 yesterday. A year ago their price was $20.42. Market price dropped $13.68 or nearly 67% last year.

Assuming Goodyear's stock trades in the range of $2 to $10 this next year, its recent $6.74 price might rise by $1.26 to reach $8.00by April 17, 2021.

GT Dividends

Goodyear's most recent declared quarterly dividend was $0.16 paid March 20th. That $0.16 Q dividend is now suspended to save cash for the coming storm.

MGA Gains?

Adding the $00 annual estimated dividend to my $1.26 optimistic estimate of The Goodyear Tire & Rubber Co price upside shows a $1.26 potential gross gain, per share, reduced by any costs to trade those shares.

Put a little under $1,000.00 today in Goodyear Tire & Rubber Co at the $6.74 share price, buys 148 shares of GT.

A $10 broker fee paid half at purchase and half at sale could cost about $0.07 per share.

Subtract that $0.07 brokerage cost from my estimated $1.26 gross gain per share results in a net gain of $1.19 X 148 shares = $176.12 or a 17.6% net gain on a $997.52 investment.

Therefore,Goodyear Tire & Rubber Co, whose trading ticker symbol is GT shows a possible 17.6% net gain including no dividend yield. It could be more, it could be less.

The above speculation is based on past performance and supposition. Only time and money invested will tell if Goodyear Tire & Rubber Co (GT) is worth the expenditure.

Disclosure: 

This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall ...

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Moon Kil Woong 4 years ago Contributor's comment

What was their inventory? It needs to be all written down because the cost to make new tires is substantially lower. Likewise demand has dropped as miles driven by cars has dropped dramatically. The share droop in my eyes is rational although the business with survive. It will just need to recuperate.

Craig Richards 4 years ago Member's comment

I think it's too soon to buy $GT. No one is going to need new tires for quite a while. Just because Trump claims we can now see the light at the end of the tunnel, does not mean it's true. Unfortunately, the Pandemic likely still has months of fight left it in.