Goodyear Stock Runs on a Smooth Road (GT)

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Goodyear Tire & Rubber ( GT ) celebrated its 117th year in business with record results in 2015. This Zacks Rank #1 (Strong Buy) is expected to grow earnings in the double digits again in 2016.

Goodyear is one of the world's largest tire companies with 49 production facilities in 22 countries around the world.

Goodyear Registers Another Beat in Q4

On February 9, Goodyear reported its fourth quarter results and beat the Zacks Consensus by 19 cents. Earnings were 93 cents per share compared to the consensus of 74 cents per share, making it Goodyear's 7th straight beat in a row.

Meanwhile, earnings grew 16% in North America and 20% in Asia Pacific, both of which were records. The Europe, Middle East and Africa markets appeared to be on their way to recovery.

Sales, however, fell to $4.1 billion from $4.4 billion a year ago. Being a global company, the company saw unfavorable currency translation impacts to the tune of $339 million.

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Tire unit volumes rose 7% to 42.1 million partially due to the acquisition of Nippon Goodyear Ltd in Japan. Replacement tire shipments rose 9% and original equipment unit volume jumped 2%.

Goodyear's Estimates Rise for 2016

With the solid earnings report, analysts have been raising estimates.

One estimate was raised already since the report for 2016, pushing the Zacks Consensus to $3.71 from $3.65. That's earnings growth of 11.7%. Not too shabby in a difficult economic environment for an automotive parts manufacturer that is 117 years old.

Goodyear's Buyback Program Increased

Goodyear had a $450 million buyback program in place in the fourth quarter. It purchased 3 million shares for $100 million during that time.

On February 4, it announced it was increasing the buyback by $650 million to a total of $1.1 billion.

Goodyear also continues to pay a dividend which is currently yielding 1%.

Goodyear Stock is Dirt Cheap

Goodyear stock has fallen from their recent highs in the 2016 sell off.

That has created a buying opportunity in a company that is still growing earnings.

Goodyear is cheap. It has a forward P/E of just 7.4, and it's price-to-sales ratio is 0.4. A P/S ratio under 1.0 usually indicates value.

Goodyear's price-to-book ratio, another value indicator, is just 1.8. A P/B ratio under 3.0 can mean a company is undervalued.

For investors looking for somewhere to hide in a volatile market, Goodyear is one to keep on the short list.

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Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.

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The post Goodyear Stock Runs on a Smooth Road ( GT ) appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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