Investors looking at ways to play the electrification trend (and the rise of electric vehicles overall) may certainly have benefited from investing in Tesla (NASDAQ: TSLA) over the course of the past decade.
The company’s stock chart above highlights the kind of growth investors who bought into this trend have experienced in recent years. Though Tesla’s returns have been lumpy, and the EV maker’s allure now comes from more than just electric vehicles (the Elon Musk-led firm calls itself an AI, robotics and autonomous vehicle company), it’s also true that this is a sector that’s clearly poised for big growth over the long-term.
For investors looking for a much more undervalued way to play many of the underlying growth trends in the EV sector, here’s one overlooked Canadian stock I think is worth a look right now.
Source: Getty Images
Magna International
Magna International (TSX: MG) is a top Ontario-based auto manufacturing giant, often considered Canada’s way to play the vehicle sector overall.
That said, in recent years, Magna has made a big pivot toward the EV sector. Via various partnerships with other industry-leading players in this sector (not Tesla), Magna has become a go-to option for investors looking to play the broader global growth trade in this intriguing space.
The company’s product line is extensive, with Magna producing everything from lightweight everyday cars to larger commercial vehicles. With various manufacturing lines and the ability to pump out volume, those looking for an entry point into the Canadian EV market really only have one choice at present.
What I find particularly compelling about Magna is the company’s valuation relative to its growth potential. Trading at just 13 times earnings with a dividend yield that’s ballooned to around 4%, this stock represents a solid buying opportunity for those seeking value and yield in addition to growth in what could be one of the best sectors to invest in long term.
I’m of the view that the transition toward electric vehicles will continue. If you share this view, Magna certainly looks like a compelling option here.
