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My Toyota (NYSE: TM) conks out at stoplights. Would you believe I think that's a competitive advantage?

So here's the deal: I have a Prius, and it's supposed to do that -- the gas engine cuts off at stops (often freaking out my passengers), and that's part of Toyota's Hybrid Synergy Drive that boasts great gas mileage and low emissions. The Prius (and I do love mine) is a good example of the kind of cutting-edge product a forward-looking company comes up with.

I'm not that biased, of course. Take a drive around town and you're bound to see tons of Toyotas -- Camrys, Corollas, Tacomas, Tundras, RAV4s, Land Cruisers, Highlanders, maybe even the tiny Yaris. Not to mention the Priuses (or is that, Prii?), which have become ubiquitous enough for its drivers to be mocked on South Park. (And no, I don't give other Prius drivers the thumbs-up when I drive past them.)

That may be anecdotal evidence, but it's borne out by fact; Toyota has been quite a success story over the last couple years, winning over more and more American consumers whom Detroit has disappointed. For all intents and purposes, Toyota tied with General Motors (NYSE: GM) in global auto sales in 2007. (GM sold just 3,000 more than Toyota did, not exactly a clear "win.") Toyota's rising star has been a bright spot in a beleaguered industry.

Who wants car stocks in a stalling economy?
Toyota's gotten lots of attention for giving GM a run for its money, but its stock price has actually decreased over the last year. Maybe it's because of the difficulties of the automobile industry at large. (Come on, when you think of GM, Ford (NYSE: F), and Daimler (NYSE: DAI), you don't think of much good, do you?) Japanese rival Honda (NYSE: HMC) hasn't been able to make much headway either.

Current concerns about a possible recession and its near-term impact on consumer spending for big-ticket items surely add insult to injury. Many people are in danger of foreclosure on their homes, and data shows that some are also increasingly delinquent on credit cards and, yes, auto loans. Credit standards are also expected to get tougher. That's good long-term medicine, but it certainly could be a drag for vehicle sales.

That's OK, though. I'd rather consider companies that are in a position of strength at times like these. Plus, this is the type of environment long-term investors relish -- when everybody's scared -- as opportunities to pick up stocks in great companies for cheap. Toyota's also got the added bonus of being a solid international stock for those people who would like to consider throwing a few into their portfolios. And of course, Toyota's reputation for craftsmanship, affordability, fuel efficiency, and environmental innovation positions it well for the long term.

Hot wheels, reasonable price
Toyota's been generating impressive earnings growth for the past couple years, yet it's trading at a mere 10 times trailing earnings, despite the fact that it has increased earnings by 16% over the last 12 months. (Daimler's trading at a price-to-earnings ratio of 33, Honda's P/E is 16, and GM and Ford -- well, those two are having serious challenges with profitability, as you've probably noticed if you have any interest in the auto industry.) Toyota's PEG ratio is 1.32, and while a PEG of 1.0 is usually the indicator of a "fairly valued" stock, that's not at an alarming level. (Daimler and Honda sport PEG ratios of 2.37 and 2.57, respectively -- not so tempting.)

Meanwhile, it helps the long-term horizon for Toyota when you consider how ahead of the curve it has been. I can't help getting back to the Prius. It's the best-selling hybrid vehicle on the market. The U.S. Department of Energy deemed the 2008 Prius the most fuel-efficient car here in the U.S. And given many signs that consumers and regulators are going to demand such innovations, not to mention the high price of gas, it looks like a bright long-term horizon to me, provided that Toyota can continue innovating on this level.

Toyota is a leader in an industry that has been fraught with lemons lately, and it could be an international stock with huge potential for your portfolio. Thus far, it scores favorably with our Motley Fool CAPS community, with a four-star rating. Do you agree that Toyota is the Best International Stock for 2008? Just zoom on over to CAPS and mark Toyota "outperform," and we'll release the results next week. Happy motoring!

Alyce Lomax likes driving around in her Prius but does not own shares of any of the companies mentioned. The Motley Fool has a fuel-efficient disclosure policy.