There has been plenty of support for retailers JB Hi–Fi Limited (ASX: JBH) and Harvey Norman Limited (ASX: HVN) since Joe Hockey spruiked his "have-a-go budget" to small business owners with a $20,000 tax incentive.
But after the dust settles and every small business owner in Australia has had their fill of new LCDs and laptops, very few traditional retailers have the capacity to turn the budget splash into long-term cash.
Enter quiet achiever Automotive Holdings Group Ltd. (ASX: AHG), Australia's largest motoring group.
While the share price has crept back up to 52-week highs on the back of the budget news, there is still plenty of reason to be a buyer at today's price, especially when a 4.8% fully franked dividend is thrown in.
Now that a small business can write off any expense under $20,000 automatically (think new hatchbacks, used trucks and tradies' utes) it is natural to be bullish about Automotive Holdings' dealership arm.
And with 100 dealerships spread across the country, that arm is a strong one.
Automotive Holdings is Australia's largest aggregator of what remains a hugely fragmented sector – with many dealerships still being run as individual or family businesses.
So while the company keeps its showroom floors ticking with new car sales, the cash register only really begins to sing once those customers sign on for the finance deals, purchase the extended warranties and return for dealership services.
Automotive Holdings will even make a quid selling spare parts back to the very same customers as their cars age!
Therin lies the beauty of the business for investors.
Automotive Holdings is uniquely positioned in the consumer discretionary space, not only for a short-term boost from the government's largesse, but also to turn it into meaningful earnings over the longer term.
Automotive Holdings has been a real momentum stock over the past five years as increased efficiencies across its car operations and the astute acquisition of privately owned retailers have snowballed it into the ASX 200.
But management has been carefully spreading its wings into other aspects of road transport as well.
Automotive Holdings now boasts a number of logistics businesses across Australia, including Rand Transport, Harris Refrigerated Transport, Scott's Refrigerated Freightways and JAT Refrigerated Road Services.
This leaves the company positioned as the largest cold storage logistics business in the country, and last year alone it shipped 8.2 million pallets of frozen, chilled and fresh goods.
Foolish takeaway
While the new car industry can be cyclical and follow general trends in the wider consumer discretionary space, the opportunities presented to Automotive Holding Group by the recently announced budget measures are a pointed reminder of what makes Automotive Holdings stand above the crowd.
While the current price sits at the peak of historical graphs, there is a long road ahead for Automotive Holdings. But its ability to pay strong fully franked dividends that grow year on year makes this stock one that won't depreciate as soon as you drive it off the lot!
