Thu. Jul 18th, 2024

The ultimate EV stock to buy now with $1,000

By Vaseline May30,2024

Electric car is being charged

Image source: Getty Images

Magna International (TSX:MG) is a Canadian automotive giant that produces parts at 344 manufacturing facilities and has 104 product development facilities in 29 countries. It is one of the largest Canadian companies and was recognized in the Forbes Global 2000 in 2022. The company generates 46% of its revenue from North America and 43% from Europe.

Here’s more about why I think Magna could be one of the best growth stocks to invest $1,000 right now, especially for those looking to do so in the electric vehicle (EV) sector.

Strong financial picture

One of the most important factors investors should consider when it comes to a company is its financials. Looking under the hood can provide insight into how the business is performing and whether this performance is likely to continue.

Magna’s current financial position looks strong. The company can pay a dividend yield of 4%, largely thanks to its strong cash flows. And with a price-to-earnings ratio of about 13 times, this is a stock that won’t break the bank. Value investors can buy this stock with confidence, especially given the long-term growth potential the EV sector offers.

Shares of Magna have been falling since the company reported earnings, which were actually down year over year (on a tough numbers basis). However, net sales increased by almost 3%, and Magna will benefit from strong production growth and on-shoring trends in the coming years.

Where will Magna stock go from here?

Magna International aims to continue its above-average growth and position itself as a world-class manufacturer that meets customer demands and leaves a footprint in the global market. Furthermore, Magna International has increased its dividend every year since 2009, gaining dividend provider status.

The company’s growth should remain strong going forward. Magna revised its projections for 2024, expecting revenue between $42.6 billion and $4.2 billion. Furthermore, the company’s revenue per share of 12.90% and three-year revenue growth rate help it outperform global competition of around 69.74%. Magna International expects its adjusted profit margin before interest and taxes to increase by 180 basis points or more by the end of 2026, ranging from 7.0% to 7.7%.

Is Now the Time to Add to These EV Stocks?

Magna International is one of the best performing stocks on the Toronto Stock Exchange. Investing in this stock will allow you to reap the benefits of higher returns in the long term, and it will help you deal with market volatility. Although the company witnessed a decline in this share price in the first quarter of 2024, it has the potential to double the price in the future, making this the right time to invest.

Moreover, the company expects to increase its profits by 95% in the next two years, which will make the future of Magna International bright. The company’s higher dividend yield indicates its positive performance in the market, indicating that you should add this popular stock to your investment portfolio. Furthermore, Magna’s strong cash flow generation and balance sheet help its investors reward with higher dividends even during market fluctuations.

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