Goodyear Tire & Rubber is up 64 percent this year, placing it among the top 25 performers in the Standard & Poor’s 500 index. That’s more than triple the almost 19 percent rise of the broader market.
Shareholders are also encouraged by the company’s decision to reinstate its dividend after more than a decade. In the fourth quarter it will pay out 5 cents per share, its first dividend since December 2002. That produces a modest yield; just 0.9 percent compared with the average 2 percent yield of the S&P 500.
“Goodyear’s outlook hasn’t looked this sound in over a decade,” financial analyst Itay Michaeli of Citi Investment Research wrote in a recent note to clients. He gives Goodyear a “Buy” rating with a one-year price target of $28. Even so, he couples that rating with a “High Risk” designation, citing several factors, including the amount of debt on the company’s balance sheet.Associated Press