We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Dividend-Friendly Auto Stocks to Weather the Industry Challenges
Read MoreHide Full Article
Key Takeaways
Genuine Parts has paid dividends since 1948 and raised them for 70 straight years, with a 3.32% yield.
Magna offers a 3.13% yield, a 29% payout ratio and more than 90% of its 2028 business already booked.
Toyota yields 2.92% and plans 100 yen per share in fiscal 2027, while Ford's dividend yield is 4.54%.
The auto industry faces a challenging road ahead. At its September meeting, the Federal Reserve raised the federal funds rate by 25 basis points to 3.75-4%, its first hike since 2023, as persistent inflation remains a concern. Higher borrowing costs could further strain consumers and businesses, weighing on demand in the highly cyclical auto sector. Meanwhile, uncertainties surrounding the Iran conflict add another layer of risk to the economic outlook.
Against this backdrop, dividend investing could provide investors with a potential source of steady income and downside support. Genuine Parts Company (GPC - Free Report) , Magna International (MGA - Free Report) , Toyota (TM - Free Report) and Ford (F - Free Report) are four dividend-paying auto stocks worth considering now.
Dividend Investing is the Key
Amid market uncertainty, dividend investing remains a popular strategy. Dividend-paying companies often have mature businesses, strong fundamentals, sustainable cash flows and solid balance sheets, making them relatively resilient during volatility.
Since dividends are typically paid from profits, companies paying more than they earn face risks of payout cuts. Therefore, investors should prioritize companies with consistent earnings growth and a strong history of increasing dividends.
Dividend growth stocks can provide steady income, downside protection and potential capital appreciation, making them more attractive for long-term income investors.
Targeting dividend stocks and combining them with a Zacks Rank of less than or equal to #3 (Hold), along with a VGM Score of A or B, will likely ensure a steady stream of cash to your portfolio. Using the Zacks Stocks Screener, we have ensured that the selected stocks have a dividend yield of more than 2%, with five-year historical dividend growth in excess of 0.1% and a payout ratio below 60%.
Genuine Parts: It distributes automotive and industrial replacement parts and materials. This auto parts company has paid a cash dividend every year since going public in 1948. In February, Genuine Parts approved a 3.2% hike to its quarterly cash dividend for 2026, representing its 70th consecutive year of increased dividends. It pays out 57% of its profits as dividends. Currently, the dividend yield of the company is 3.32%. GPC had an annualized growth rate of 5.28% over the past five years.
Genuine Parts benefits from steady replacement demand, broader industrial activity and disciplined bolt-on acquisitions that deepen local market coverage. Motion’s MRO base and value-added solutions support growth, while restructuring savings and ample liquidity help fund investment and dividends.
The stock currently carries a Zacks Rank #3 and has a VGM Score of B. The Zacks Consensus Estimate for 2026 and 2027 EPS implies year-over-year growth of 5% and 8%, respectively.
Magna: It is a mobility technology company and global automotive supplier.In February, the auto equipment supplier raised its dividend for the 16th consecutive year. It pays a quarterly dividend of $0.495 a share ($1.98 annualized). Currently, the dividend yield of the company is 3.13%. Magna had an annualized growth rate of 2.64% over the past five years. Its payout ratio of 29 also looks quite sustainable on the back of solid prospects.
Magna’s diversified product portfolio, strong bookings and expanding technology content across electrification, ADAS and software enhance its prospects. More than 90% of its 2028 business is already booked, while recent launches and new assembly programs provide revenue visibility. Productivity gains are also improving profitability, while strong liquidity adds financial support.
The stock currently carries a Zacks Rank #3 and has a VGM Score of A. The Zacks Consensus Estimate for 2026 and 2027 EPS implies year-over-year growth of 23% and 11%, respectively.
Toyota: It is the leading Japanese automaker. In fiscal 2026, Toyota raised its annual dividends by 5.5% to ¥95 per share and expects to pay ¥100 per share in fiscal 2027. Currently, the dividend yield of the company is 2.92%. Toyota had an annualized growth rate of 11.95% over the past five years. Its payout ratio of 25 also looks quite safe.
Toyota is well positioned to benefit from rising hybrid adoption, with expanding HEV sales, higher electrified vehicle penetration and continued investments in next-generation battery capacity supporting long-term demand. Its growing value-chain businesses, including financing and connected services, provide stable recurring earnings, while a higher fiscal 2027 sales outlook and manufacturing expansion in key markets reinforce growth prospects.
The stock currently carries a Zacks Rank #3 and has a VGM Score of B. The Zacks Consensus Estimate for fiscal 2027 and 2028 EPS implies year-over-year growth of 3% and 16%, respectively.
Ford: It is one of the leading automakers in the United States. The company hasn’t hiked its dividend since 2022, but it has occasionally paid supplemental dividends and is also one of the highest-yielding auto stocks. Currently, the dividend yield of the company is 4.54%. Ford had an annualized growth rate of 7.07% over the past five years. It has a fairly acceptable payout ratio of 36.
Ford is strengthening its long-term earnings profile through the continued expansion of Ford Pro, where commercial vehicles, software subscriptions and services provide recurring, higher-margin revenue. A favorable mix of trucks, utilities and hybrids, along with an affordable EV strategy, growing Ford Energy opportunities and solid liquidity support future growth.
The stock currently carries a Zacks Rank #3 and has a VGM Score of A. The Zacks Consensus Estimate for 2026 and 2027 EPS implies year-over-year growth of 71% and 4%, respectively.
View the Zacks #1 Rank List
Image: Shutterstock
4 Dividend-Friendly Auto Stocks to Weather the Industry Challenges
Key Takeaways
The auto industry faces a challenging road ahead. At its September meeting, the Federal Reserve raised the federal funds rate by 25 basis points to 3.75-4%, its first hike since 2023, as persistent inflation remains a concern. Higher borrowing costs could further strain consumers and businesses, weighing on demand in the highly cyclical auto sector. Meanwhile, uncertainties surrounding the Iran conflict add another layer of risk to the economic outlook.
Against this backdrop, dividend investing could provide investors with a potential source of steady income and downside support. Genuine Parts Company (GPC - Free Report) , Magna International (MGA - Free Report) , Toyota (TM - Free Report) and Ford (F - Free Report) are four dividend-paying auto stocks worth considering now.
Dividend Investing is the Key
Amid market uncertainty, dividend investing remains a popular strategy. Dividend-paying companies often have mature businesses, strong fundamentals, sustainable cash flows and solid balance sheets, making them relatively resilient during volatility.
Since dividends are typically paid from profits, companies paying more than they earn face risks of payout cuts. Therefore, investors should prioritize companies with consistent earnings growth and a strong history of increasing dividends.
Dividend growth stocks can provide steady income, downside protection and potential capital appreciation, making them more attractive for long-term income investors.
Targeting dividend stocks and combining them with a Zacks Rank of less than or equal to #3 (Hold), along with a VGM Score of A or B, will likely ensure a steady stream of cash to your portfolio. Using the Zacks Stocks Screener, we have ensured that the selected stocks have a dividend yield of more than 2%, with five-year historical dividend growth in excess of 0.1% and a payout ratio below 60%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
4 Auto Stocks for Income Investors
Genuine Parts: It distributes automotive and industrial replacement parts and materials. This auto parts company has paid a cash dividend every year since going public in 1948. In February, Genuine Parts approved a 3.2% hike to its quarterly cash dividend for 2026, representing its 70th consecutive year of increased dividends. It pays out 57% of its profits as dividends. Currently, the dividend yield of the company is 3.32%. GPC had an annualized growth rate of 5.28% over the past five years.
Genuine Parts Company Dividend Yield (TTM)
Genuine Parts Company dividend-yield-ttm | Genuine Parts Company Quote
Genuine Parts benefits from steady replacement demand, broader industrial activity and disciplined bolt-on acquisitions that deepen local market coverage. Motion’s MRO base and value-added solutions support growth, while restructuring savings and ample liquidity help fund investment and dividends.
The stock currently carries a Zacks Rank #3 and has a VGM Score of B. The Zacks Consensus Estimate for 2026 and 2027 EPS implies year-over-year growth of 5% and 8%, respectively.
Magna: It is a mobility technology company and global automotive supplier.In February, the auto equipment supplier raised its dividend for the 16th consecutive year. It pays a quarterly dividend of $0.495 a share ($1.98 annualized). Currently, the dividend yield of the company is 3.13%. Magna had an annualized growth rate of 2.64% over the past five years. Its payout ratio of 29 also looks quite sustainable on the back of solid prospects.
Magna International Inc. Dividend Yield (TTM)
Magna International Inc. dividend-yield-ttm | Magna International Inc. Quote
Magna’s diversified product portfolio, strong bookings and expanding technology content across electrification, ADAS and software enhance its prospects. More than 90% of its 2028 business is already booked, while recent launches and new assembly programs provide revenue visibility. Productivity gains are also improving profitability, while strong liquidity adds financial support.
The stock currently carries a Zacks Rank #3 and has a VGM Score of A. The Zacks Consensus Estimate for 2026 and 2027 EPS implies year-over-year growth of 23% and 11%, respectively.
Toyota: It is the leading Japanese automaker. In fiscal 2026, Toyota raised its annual dividends by 5.5% to ¥95 per share and expects to pay ¥100 per share in fiscal 2027. Currently, the dividend yield of the company is 2.92%. Toyota had an annualized growth rate of 11.95% over the past five years. Its payout ratio of 25 also looks quite safe.
Toyota Motor Corporation Dividend Yield (TTM)
Toyota Motor Corporation dividend-yield-ttm | Toyota Motor Corporation Quote
Toyota is well positioned to benefit from rising hybrid adoption, with expanding HEV sales, higher electrified vehicle penetration and continued investments in next-generation battery capacity supporting long-term demand. Its growing value-chain businesses, including financing and connected services, provide stable recurring earnings, while a higher fiscal 2027 sales outlook and manufacturing expansion in key markets reinforce growth prospects.
The stock currently carries a Zacks Rank #3 and has a VGM Score of B. The Zacks Consensus Estimate for fiscal 2027 and 2028 EPS implies year-over-year growth of 3% and 16%, respectively.
Ford: It is one of the leading automakers in the United States. The company hasn’t hiked its dividend since 2022, but it has occasionally paid supplemental dividends and is also one of the highest-yielding auto stocks. Currently, the dividend yield of the company is 4.54%. Ford had an annualized growth rate of 7.07% over the past five years. It has a fairly acceptable payout ratio of 36.
Ford Motor Company Dividend Yield (TTM)
Ford Motor Company dividend-yield-ttm | Ford Motor Company Quote
Ford is strengthening its long-term earnings profile through the continued expansion of Ford Pro, where commercial vehicles, software subscriptions and services provide recurring, higher-margin revenue. A favorable mix of trucks, utilities and hybrids, along with an affordable EV strategy, growing Ford Energy opportunities and solid liquidity support future growth.
The stock currently carries a Zacks Rank #3 and has a VGM Score of A. The Zacks Consensus Estimate for 2026 and 2027 EPS implies year-over-year growth of 71% and 4%, respectively.