Automotive Holdings Group Ltd (ASX: AHG), AP Eagers Ltd (ASX: APE) and AMA Group Ltd (ASX: AMA) are three turbocharged automotive stocks worthy of a spot on your watchlist.
Automotive Holdings Group
Automotive Holdings Group is a national vehicle retailer and logistics specialist with interests in all major Australian states. The company's logistics brands include Harris Refrigerated Transport, Rand, Scott's and JAT. It also distributes motorbikes, cars and larger vehicles. In the year ahead, analysts are forecasting a slight reduction in profits per share but a dividend equivalent to a yield of 5.9% fully franked. Impressive!
AP Eagers
AP Eagers is Australia's oldest automotive group, with dealerships across the eastern states of Australia and the Northern Territory. The company specialises in dealing in the most popular car, truck and bus brands, as well as luxury automotives. AP Eagers owns a significant stake in Automotive Holdings Group. Most recently, AP Eagers forecast a record annual profit of between $135 million and $140 million for the year ended 31 December 2016. It is expected to pay a dividend of 3.7% fully franked.
AMA Group
AMA Group has a market capitalisation of $464 million, which compares to AP Eagers' $1.7 billion. This smaller capitalisation company specialises in vehicle repairs and related services. The company has grown both organically and by acquisition, having most recently acquired six accident repair centres for an implied operating profit multiple of two times (read 'cheap'). Although the company's shares currently trade on a dividend yield of just 1.7% fully franked, if the company continues to grow like it has, its dividend payments should follow suit.
Foolish Takeaway
These three companies have proven to be reliable investments in recent years. However, they are not without their risks, so you should consider doing further research and getting comfortable with them before buying in. If I were to choose one auto stock to buy today it would be AMA Group for growth.
