Like a lot of industries, the automobile sector has been riding high over the last few years. After getting crushed during the pandemic, the post-pandemic years and reopening of the economy have been pretty good for the sector. This, along with rising interest in electrification of vehicles and low interest rates, has managed to push the sector higher, return many firms to profitability, and restart some stagnated dividends.
But the surge in the auto industry may be slowing.
Like many sectors, the return to a more normalized interest rate environment is having an effect on car sales, while higher gas prices and discrepancies within the used/new car market are making for some strange bedfellows. In the end, investors may need to tread cautiously in the sector going forward.
Our Best Dividend Stocks Model Portfolio has some of the highest-rated stocks by our proprietary Dividend.com Safety rating system.
