Forget Tesla: Buy These Top Canadian Stocks Instead

Investors should forget about Tesla and target Canadian stocks like Magna International Inc. (TSX:MG)(NYSE:MGA) instead.

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Tesla has soared to all-time highs in 2021 on the back of surging investor confidence in the electric vehicle (EV) space. However, its shares have plunged 13% week over week as of close on November 15. The company has seen its market cap slip back below the $1 trillion mark. Meanwhile, co-founder and CEO Elon Musk has moved to dump Tesla stock while parrying criticism on social media platforms. Today, I want to look at three Canadian stocks that look like a better bet than Tesla as volatility picks up. Let’s dive in.

This top auto parts manufacturer is also benefiting from the EV boom

Magna International (TSX:MG)(NYSE:MGA) is an Aurora-based company that designs, engineers, and manufactures components, assemblies, and other equipment for manufacturers of vehicles and light trucks around the world. Shares of this Canadian stock have climbed 24% in 2021 as of close on November 15. The stock is up 39% year over year.

Last month, I’d discussed why Magna looked discounted compared to its peers. It released its third-quarter 2021 earnings on November 5. Sales rose to $27.1 billion for the first nine months of 2021 — up from $22.0 billion for the same stretch in 2020. Meanwhile, adjusted EBITDA climbed to $1.55 billion over $581 million in the prior year-to-date period.

Shares of this Canadian stock possess a favourable price-to-earnings (P/E) ratio of 14. It offers a quarterly dividend of $0.43 per share. That represents a modest 1.9% yield.

A Canadian stock that has staged a huge comeback since early 2020

AutoCanada (TSX:ACQ) is another auto-focused Canadian stock to consider over Tesla today. This Edmonton-based company operates franchised automobile dealerships across the country. Shares of this Canadian stock have increased 61% in 2021. However, the stock has plunged 21% over the past week. Investors may want to consider buying the dip in this Canadian stock over Tesla.

In Q3 2021, the company reported revenue of $1.20 billion — up from $1.01 billion in the previous year. Meanwhile, net income rose to $38.0 million over $36.0 million in the third quarter of 2020. Adjusted EBITDA delivered growth of 12% to $68.3 million. AutoCanada has managed to navigate a challenging environment, posting strong used vehicle sales and bolstering its presence in the United States.

This Canadian stock last had an attractive P/E ratio of 9.1. Its shares last had an RSI of 30, putting it just outside technically oversold territory.

One more Canadian stock I’d snatch up instead of Tesla

Linamar (TSX:LNR) is the third and final Canadian stock I’d snag over Tesla in this climate. This Guelph-based company is also engaged in the design, development, and sale of auto parts to a global market. Shares of this Canadian stock have climbed 15% in the year-to-date period. The stock is up 29% year over year.

The company unveiled its Q3 2021 earnings on November 9. It boasts a fantastic balance sheet and ended the quarter with liquidity of $1.8 billion — up from $1.3 billion at September 30, 2020. Net earnings in the year-to-date period increased to $370 million, or $5.65 per share — up from $166 million, or $2.54 per share, for the first nine months of 2020.

Shares of this Canadian stock possess a favourable P/E ratio of 10. It offers a quarterly dividend of $0.20 per share. That represents a modest 1% yield.

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. The Motley Fool recommends Magna Int’l and Tesla.

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