Buyback Bonanza: 3 Auto Stocks That Really Believe in Themselves

Group 1: Honda Motor Co. - Honda Motor Co. is expected to have a strong year in profits due to high demand for hybrids in the U.S. and motorcycles in Asia, with projected earnings increased from 1.25 trillion yen ($8.0 billion USD) to 1.42 trillion yen ($9.07 billion USD) for fiscal 2025 [1] - The company plans to buy back 3.7% of its shares, spending 300 billion yen ($1.92 billion USD), marking the largest share repurchase in its history [2] - Despite generating significant profits, Honda's shares have only gained 30% over the past five years, indicating potential undervaluation [2] Group 2: Stellantis - Stellantis stock has fallen 10.2% in the past month, with an enterprise value of $45.71 billion, representing a low valuation at 1.47x EBITDA [5] - The company reported weaker results in Q1 2024 but expects improved growth and profitability in the second half of the year due to the introduction of new models [6] - Stellantis announced a share buyback of up to 3 billion euros ($3.25 billion USD) by the end of 2024, with a total yield of 11.4% from share repurchases and dividends [7] Group 3: Ford - Ford stock is down 6.8% in the past month, with an enterprise value of $165.27 billion and a high EBITDA multiple of 17.41x, influenced by $80.2 billion in long-term debt [10] - The company targets shareholder distributions of 40-50% of adjusted free cash flow, expecting $7 billion in adjusted free cash flow for 2024 [11] - Ford plans to pay out $2.4 billion in regular dividends and potentially repurchase up to $400 million of its stock in 2024 [12] Group 4: Mercedes Benz Group - Mercedes Benz Group stock has decreased by 11.1% in the past month, with an enterprise value of 142.58 billion euros ($154.38 billion) at 5.22x EBITDA [14] - The company faced a 4% revenue reduction and a 26% decline in net income in Q1, expecting flat revenue for 2024 compared to 2023 [15] - Mercedes initiated a share repurchase program in March 2023, authorizing up to 4 billion euros ($4.33 billion USD) and has repurchased 33 million shares for 2.31 billion euros ($2.50 billion USD) by March 2024 [18]