Canadians: Here’s How You Can Invest in Automated Vehicles in April

Canadians should seek access to the automated vehicle space by investing in stocks like Magna International Inc. (TSX:MG)(NYSE:MGA).

| More on:
Where to Invest?

Image source: Getty Images

Drivers can expect to see many more automated vehicles on the roads in the decades ahead. However, this technology is still in its early development stages right now. A recent report from Grand View Research projected that the global autonomous vehicle market would expand at a strong rate of 63% from 2021 through 2030. Canadian investors should be eager to get in on stocks linked to automated vehicles. Below are three promising options in this space.

This top auto parts manufacturer is moving into this exciting space

Magna International (TSX:MG)(NYSE:MGA) is an Aurora-based company that designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks around the world. Back in January, I’d suggested that investors should scoop up Magna as it moved into the electric vehicle space. It also has a role to play in automated vehicle development.

Shares of Magna have climbed 27% in 2021 as of mid-morning trading on April 6. The stock has surged nearly 150% in the year-over-year period. Back in 2017, Magna joined BMW, Intel, and others aiming to develop new technology that could put automated vehicles on the road by 2021. Unfortunately, these goals have seen some setbacks due to the COVID-19 pandemic. That same year, Magna unveiled the MAX4 self-driving platform. This autonomous driving platform can be integrated into any vehicle without compromising interior or exterior design.

Magna stock last had a price-to-earnings ratio of 36, putting it in a better value position than the industry average. It also boasts a quarterly dividend of $0.43 per share, which represents a modest 1.9% yield.

A Canadian ETF offering exposure to automated vehicle development

Canadians hungry for broad exposure to the automated vehicle market may want to explore an exchange-traded fund. The Evolve Automobile Innovation ETF (TSX:CARS) seeks to replicate the performance of the Solactive Future Cars Index Canadian Dollar Hedged. It invests in equities that are directly or indirectly involved in developing electric drivetrains, autonomous driving, or network connected services for automobiles.

Shares of this automated vehicles-linked ETF Have climbed 11% in 2021 so far. The ETF has soared nearly 200% from the prior year. Some of the top holdings in this ETF include Volkswagen, Texas Instruments, and Porsche Automobil.

How Blackberry is betting on the automated vehicle sector

BlackBerry (TSX:BB)(NYSE:BB) is the last stock I want to target for Canadians eager for exposure in this sector. The Waterloo-based company has gained a foothold in promising sectors like cyber security and the development of automobile software. It may not be a global leader in automated vehicle development, but it has made promising strides in recent years.

Shares of BlackBerry have climbed 35% in 2021 so far. The stock is up over 130% year over year. In 2016, the company announced the creation of the BlackBerry QNX Autonomous Vehicle Innovation Centre (AVIC) aimed at advancing automated vehicle technology in collaboration with the private and public sectors. Earlier this year, Blackberry partnered with the Chinese tech giant Baidu to power next generation automated vehicle technology.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. David Gardner owns shares of Baidu. Tom Gardner owns shares of Baidu. The Motley Fool owns shares of and recommends Baidu. The Motley Fool owns shares of Texas Instruments. The Motley Fool recommends BlackBerry, BlackBerry, Intel, and Magna Int’l and recommends the following options: long January 2023 $57 calls on Intel and short January 2023 $57 puts on Intel.

More on Investing

Dividend Stocks

Turn a $10,000 Investment Into $844 in Cash Every Year

The power of compound interest from regular investments in quality dividend stocks can deliver solid long-term returns and make you…

Read more »

Dividend Stocks

Grab This 10.8% Dividend Yield Before It’s Gone!

This dividend stock is down 43% in the last year, and it's about to turn around in the near future.…

Read more »

grow dividends
Dividend Stocks

2 TSX Dividend Stocks With Seriously Huge Payouts 

If you are looking for dividend payouts of up to 7-11% of the stock price, now is the time, as…

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Dividend Stocks

For $1,000 in Annual Income, Buy 1,163 Shares of This TSX Stock

Fiera Capital is a popular TSX dividend stock as it currently offers a tasty yield of 13.3%. But is the…

Read more »

Early retirement handwritten in a note
Stocks for Beginners

Maximize Your TFSA Potential: 3 Stocks to Buy Today

TFSA investors seeking long-term income would do well to consider these three TSX stocks that could certainly maximize growth potential,…

Read more »

A plant grows from coins.
Dividend Stocks

Old Faithfuls: Canadian Stocks Whose Dividend Payments Rise Each Year

Income investors should feel safe and secure owning three dividend aristocrats, also known as the old faithful trio.

Read more »

dividends grow over time
Stocks for Beginners

Dollarama: This Safe TSX Stock Has Rallied in 9 Out of the Last 10 Years

These key factors make Dollarama one of the safest Canadian stocks to bet on for the long term.

Read more »

Retirement plan
Dividend Stocks

Boost Your CPP Pension With This Simple Hack

The CPP takeout decision is never easy, although one simple hack can significantly increase the pension payment.

Read more »