DAMASCUS, MD (MarketWatch) — This is a car that sips gas, so everyone wants one.
“You can’t find one” on a dealer’s lot now, one Prius owner told me at the gas pumps. He beamed like a proud father when we asked about his car and quickly informed us how much it cost him to fill up. Fortunately, we were not testing a big SUV that day.
One can debate forever if a hybrid makes sense, but one can’t debate the fact that the Prius sips gas, is good on emissions, and lets owners save green and feel green.
According to some late reports, would-be buyers may have to wait six months or so for their Prius to come off the truck. To deal with the demand Toyota will retool a plant in Tupelo, Mississippi to produce the little hybrid when the building is ready to go in 2010. It would be the first Prius made in this country - all the current stock comes from a dedicated plant in Japan.
By the way, here’s another sign of changing times — that plant in Mississippi was being designed to produce the Highlander sport utility.
With all this going on, we thought it was high time to renew acquaintances with the hybrid. ( See slide show.)
Let’s get right down to the facts that matter. We got 42 miles a gallon with our test car, well above the average we got in our last test (carried out in the dead of a very cold winter).
This time the temperature was in the upper 80’s and low 90’s, yet we stayed nice and cool inside even when the Prius was stopped. That was not always the case in some hybrids.
In case you have forgotten, both an electric motor and a 4-cylinder gas engine power the Prius. Zero to 60 will come up somewhere north of 10 seconds, but we thought it felt faster.
The electric motor can propel the car by itself at slow speeds, as the engine shuts down at stop signs and red lights. It will quickly fire up when needed, but there was an occasional minor shutter.
It is comfortable enough out on the highway, but we think the car would benefit from a telescoping steering wheel in addition to one that tilts.
We also hope that the next generation of Prius, due out this fall, gets instruments that are located right in front of the driver, like 99% of all the other cars in the world. Early word is that it will be available with a solar panel that will power the air conditioning.
For the large portion of our city, suburban, and back road driving, the Prius was relatively quiet and refined.
Power, handling, and all around sports car behavior are not even issues here. However, you will find the car to be a delight in town and city driving, where, of course, it delivers its best gas mileage. But we thought the graph in the center of the dash that constantly tells you where the power is coming from, and how much gas you are saving was distracting, to put it mildly.
There was ample room front and rear, and the 60/40 split folding rear seat can create more than decent cargo room. In keeping with virtually all Toyota products, the assembly quality was top of the line.
It is easy to see why so many people want to get their hands on a Prius. While one can debate forever whether a hybrid makes sense or not, one cannot debate the fact that the Prius sips gas, is good on emissions, and will allow the owner to save green and feel green.
Our nicely-optioned car went out the door for a reasonable $24,410 including vehicle stability control (vital), backup camera, and MP3/WMA playback capability, among other goodies.
The downside? It is harder to find a new Prius for sale than to find someone who could really sing in the new Mama Mia movie.
Vehicles tested in this column are on loan from the auto companies through local distributors.

Toyota Motors’  (nyse: TM -  news  -  people ) first-quarter profit dropped 28% as a result of slipping U.S. sales, the strong yen and rising material costs.

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Toyota did outsell rival car maker General Motors (nyse: GM - news - people ) by 277,532 vehicles during the last six months. However, the company recently lowered its global vehicle sales plan for this calendar year by 350,000 vehicles to 9.5 million. The strong yen cost the company 200 billion yen ($1.8 billion) in the latest quarter. Toyota has been shifting North American production to smaller models to meet demand, but with that comes smaller profit margins as well.

We are becoming more excited about Toyota shares, which have come down 30% in the last year. We are still holding off on putting the shares on our “recommended” list, but the company’s 2.58% dividend yield is adding to the enticement.

Toyota is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.5 out of five stars.

Williams Has Good Earnings, Raises Low-End Guidance

Williams Cos. (nyse: WMB - news - people ) came through with a solid second-quarter report and raised the low end of next year’s guidance. The company is crediting strong performances in its natural gas businesses, driven by higher net realized average prices on increased production, as well as strong natural gas liquid margins. Higher operating costs partially offset these benefits.
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Mall Rats Go Into Hiding

Mall operator Macerich (nyse: MAC - news - people ) says funds from operations in its latest quarter rose to $103.2 million, or $1.16 per share, from $100.7 million, or $1.04 per share, a year ago. The company was able to squeeze out a small increase in a tough market environment.

Macerich was able to sign 370,000 square feet of specialty store leases, up 7.9% from last year. The average initial rent was $45.51. Starting base rents on new lease signings were 26.5% higher than expiring base rents. On the not so good side, occupancy slipped to 92.9%, down from 93.2% a year earlier.

We have recently avoided some of the real estate investment trusts that have exposure to mall operations. Despite the 5.65% dividend yield, we remain cautious with MAC shares, which are down nearly 30% in the last year. We would like to see the shares stabilize a bit before we feel comfortable adding them to our “recommended” list.

Macerich is not recommended at this time, holding a Dividend.com Rating of 3.3 out of five stars.

Tom Reese and Paul Rubillo are senior editors at Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news and analysis, including “Best Dividend Stocks,” as well as a detailed explanation of the Dividend.com ratings system.
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