Not many investors know that Canada is also taking a stable position in the electric vehicle market. That means there is still substantial return potential in these stocks. Canadians should keep their eyes peeled for excellent investment opportunities, as electric vehicles are a high-growth vertical in technology that promises above-market-average retirement yields.
New Flyer (TSX: NFI) is a drastically undervalued electric vehicle stock on the TSX, which every Canadian investor should own in their Tax-Free Savings Accounts and Registered Retirement Savings Plans. New Flyer designs and manufactures electric buses for public transportation systems — an even hotter electric vehicle market than that for consumers.
Public transportation should begin converting from old-school gas guzzlers to more earth-friendly electric options in the next decade. As an established player in the Canadian public transportation industry, New Flyer will have a significant competitive advantage.
Renewable energy is replacing oil on the TSX
Oil stocks may be suffering from sustained low returns on the TSX, but electric vehicles are set to gain from oil’s losses. That means Canadians need to jump on board and take advantage of the dip in New Flyer’s stock price to capture as much of these long-term gains as possible.
New Flyer even issues a healthy dividend yield of 6.26% to shareholders at the current share price of $27.19. This return is much higher than Canada’s prime interest rate of 3.95%. If you aspire to one day retire, an established and profitable player like New Flyer is precisely the stock you need in your portfolio.
There are many unprofitable technology stocks, Shopify included, which are set at outrageous valuations in the stock market. Unlike these stocks, New Flyer reports a positive diluted earnings per share of $1.68 annually. Even better, estimated future earnings growth rests at a hefty 40%.
Earnings growth is a good sign that the stock is likely to turn around. The current low share price represents a fantastic long-term buying opportunity. In 20 years, when electric vehicles are the majority on the road, New Flyer will still be around on the TSX to give you an enjoyable retirement.
Volkswagen drastically increasing electric vehicle spending
Even Volkswagen released news this week that it is planning on throwing a considerable sum of money into electric vehicle investment, automated driving, and other technology. Also announced this week is the European Investment Bank’s intention to withdraw approval of loans for use in the fossil fuel industry.
The era of Big Oil is officially over, and the green tech revolution is replacing it. Every Canadian should re-evaluate their stock portfolios in light of these recent changes. The best investments Canadians can make today are long positions in clean technology to replace any existing nonrenewable energy stocks.
New Flyer is probably the best option on the TSX because it has established itself as an active player on the TSX since it began listing on the TSX in 2011. Since then, the price has gone from $6.30 to just over $27.
Savvy Canadian investors stand to capture even higher returns in the next 20 years.
