1 Beaten-Down Canadian EV Stock (With Dividends) to Buy Now and Hold Forever

Here’s one of the best Canadian EV stocks you can buy on the dip right now to hold for the long term.

| More on:
Car, EV, electric vehicle

Image source: Getty Images

The Canadian stock market selloff has accelerated in recent weeks, as macroeconomic concerns related to high inflation, rising interest rates, and a looming recession are continuing to haunt investors. On the one hand, the recent market selloff has corrected the share prices of some seemingly overvalued growth stocks. Then, on the other hand, it has made many already oversold growth stocks look even more attractive.

In this article, I’ll talk about one such Canadian electric vehicle (EV) stock investors can consider buying right now to hold as long as they want. Interestingly, this growth stock also rewards its investors with attractive quarterly dividends.

Magna International stock

Magna International (TSX:MG)(NYSE:MGA) is an Aurora-based auto parts and mobility technology company with a market cap of $19.8 billion. After consistently rising in the previous three years, this Canadian EV stock has dived by 32.5% so far in 2022 from $102.35 per share to just $69.09 per share, underperforming the broader market by a wide margin. By comparison, the TSX Composite benchmark currently trades with 12.1% year-to-date losses.

At the current market price, MG stock offers a decent yield of around 3.3% and distributes its dividend payouts on a quarterly basis. Now, let me explain why I find this Canadian EV stock worth buying right now.

Magna’s growing interest in the EV segment

For years, Magna International has been among the largest global automotive industry suppliers. Considering a recent surge in demand for electric cars and smart mobility, it has increased its focus on expanding its offerings in EV and mobility technology segments in recent years.

While it already manufactures several critical components for electric vehicles and supplies them to large global automakers, Magna has recently developed an electric powertrain system for pickup trucks and light commercial vehicles called EtelligentForce. If you don’t already know it, pickup trucks already dominate vehicle sales in the United States market.

Magna’s EtelligentForce powertrain system simplifies the pickup truck electrification process for automakers. Interestingly, the company also claims that EtelligentForce requires less maintenance compared to traditional internal combustion engine powertrains, which could make it a very popular vehicle electrification option for auto companies in the coming years.

The demand for EVs is expected to skyrocket in the coming years, with more countries trying to move away from gasoline vehicles to cut their dependence on traditional energy products and lower their carbon emissions. This is one of the key reasons why I expect such innovative offerings for the EV segment to significantly boost Magna’s financial growth in the long run and help its stock soar.

Top Canadian EV stock to hold forever

If you’re looking for stocks that could help you generate consistent returns on investments, Magna could be a great stock for you to own forever. Despite its more than 30% year-to-date losses, it still has yielded nearly 225% positive returns in the last 10 years. In addition, its reliable dividends could help you earn extra passive income that you can reinvest in its stock to boost the potential returns on your investments in the long run.

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.

The Motley Fool recommends Magna Int’l. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Stocks for Beginners

money cash dividends
Stocks for Beginners

Got $100? 2 Top Canadian Stocks to Buy and Hold

There are some great top Canadian stocks on the market to buy and hold right now. Here's a look at…

Read more »

edit Woman in skates works on laptop
Stocks for Beginners

1 Passive Income Stream and 1 Dividend Stock for $491.80 in 2024

Need to invest but have nothing to start with? This passive income stream and dividend stock are exactly where you…

Read more »

Chalk outline of two arrows pointing in opposite directions
Dividend Stocks

How to Make $1 Million in 10 Years Through Saving and Investing

Want to make $1 million in a decade? Follow these tips on how to cut back to save and invest…

Read more »

Female hand holding piggy bank. Save money and financial investment
Dividend Stocks

Emergency Fund 101: How Much Do Canadians Really Need?

If you need an emergency fund but have no idea where to start, we've got you. Along with an easy…

Read more »

edit Sale sign, value, discount
Energy Stocks

Bargain Hunters: TRP Stock is the Best Dividend Deal Around!

TRP stock (TSX:TRP) offers a high dividend, but is still trading lower than 52-week highs. Now is the best time…

Read more »

Solar panels and windmills
Energy Stocks

So You Own Algonquin Stock: Is It Still a Good Investment?

Algonquin stock (TSX:AQN) was once a top investment for Canadians seeking a high dividend. But after a cut last year,…

Read more »

consider the options
Stocks for Beginners

TSX at Record Highs: Is it Too Late to Start Investing?

Despite its recent surge, the TSX Composite still offers great opportunities for investors to multiply their hard-earned savings over the…

Read more »

Car, EV, electric vehicle
Stocks for Beginners

I’m Bullish on Tesla (But Even MORE on This Canadian EV Stock)

Here’s why this Canadian EV stock can outperform the broader market by a big margin over the long term.

Read more »