Why not give investors a compelling reason to buy automotive stocks? Right now the Big Three offer mediocre dividends that yield less than a 4% return. You're better off putting your money in a bank, where you'll get a higher interest rate with no risk. So why not bump those dividends up to where they would yield 6%?

Want to make great returns in the stock market? Make sure you don't buy shares in any auto companies!

Despite earnest promises to improve shareholder value, the Big Three spent most of last year watching their stock prices shoot downhill faster than a six-man bobsled.

It doesn't seem to matter what they do. They implore Wall Street to give them better multiples, but their profits-to-earnings ratios are no better than they were a decade ago. They trumpet their forays into e-commerce, telematics and other high-growth ventures, but there's no discernible impact on the bottom line. They brag about their cost-cutting efforts, then watch their earnings sag in the face of record car sales. Is it any wonder investors believe there's no good reason to invest in autos?

Actually, that's not exactly true. Veteran investors know they can make decent money in autos by buying when the economy slows, car sales tank and auto stocks get hammered (like right now). Then, at the first hint of an upturn, right after they get a nice upswing, they dump all their shares (like a few years from now). Then they wait for the auto cycle to begin all over again.

Pity the poor suckers who buy when sales are booming and when automakers are speaking glowingly of all the billions of dollars in profits they're making. That's when their stocks go absolutely nowhere. Why? Because savvy investors know that, at best, profit margins will hit 5% and will more likely wallow in the 3.5% range. While the bottom-line numbers seem gargantuan, the returns aren't very good. And Wall Street wants to see that margins are growing. So when car sales are red hot, auto stocks are stuck in the doldrums. And when the cycle peaks, they're down in the dumps.

In the last few years automakers spent fortunes in futile attempts to reverse this trend. Between 1997 and 1999 General Motors Corp. spent $9 billion buying back shares to drive up stock values. Nine billion dollars is a whole lotta money, yet the market yawned. Last year GM's stock was in play only as long as investors sensed a potential buyout of Hughes Electronics, as media companies lusted after DirecTV. GM almost hit $100 a share. But when the company sold off part of Hughes and made it known it was keeping the rest, the stock tanked.

Last year Ford Motor Co. gave $5.5 billion to shareholders and spent another billion buying back shares. That didn't do anything for the stock, either.

Automakers are running scared right now. Their market capitalization (what it would cost to buy up all their stock at current market prices) is so low that the door is wide open for a competitor or corporate raider to swoop in and scoop them up. Ford's market cap is $54 billion. GM's is at a bargain-basement price of only $30 billion. DaimlerChrysler, at $47 billion, is so concerned that it has formed an anti-takeover group in conjunction with J.P. Morgan Chase and the Deutsche Bank. But it's talking about a share buy-back program: the same strategy that's failed to budge GM's or Ford's stocks.

I have another suggestion. Why not give investors a compelling reason to buy automotive stocks? Right now the Big Three offer mediocre dividends that yield less than a 4% return. You're better off putting your money in a bank, where you'll get a higher interest rate with no risk. So why not bump those dividends up to where they would yield 6%? That would offer a better return than any bank, CD or T-bill. It would jolt investors into action.

And guess what? It would cost automakers far less than their unsuccessful buy-back programs.

Of course, once you give people a compelling reason to buy your stock, that's going to move the price up, and then you have to raise the dividend even more to maintain that 6% yield. But the math still looks pretty attractive.

Let's say GM's stock moves up to $60 a share. The company would have to raise its dividend by $1.60 to get a 6% yield. That would cost it an extra $900 million a year, which is far, far less than what it's been spending to buy back shares.

If Ford's shares hit $30 it would have to raise its dividend by 80 cents a share, which would cost it an extra $1.1 billion a year. That's about what it's spending right now for its buy-backs. And it's far less expensive than the give-away it gave out last year.

If DaimlerChrysler's stock hit $55 a share, it would have to raise its dividend by $1.10. That would cost it $1.1 billion more a year, which is probably what it will spend in the same kind of buy-back program that's done nothing for GM and Ford.

Automakers still dream of transforming their image from cyclical industrials to high-tech growth companies operating at Internet speed. Like they say in the city, “fuggidaboudit.” But give investors a sure-fire way to watch their nest egg grow, and auto stocks can once again be a blue chip investment in everyone's portfolio.

John McElroy is editorial director of Blue Sky Productions and producer of “Autoline Detroit” and “American Driver” for WTVS-Channel 56, Detroit.