5 auto stocks to buy before July ends

Summary

  • The Canadian auto industry is said to contribute about C$ 19 billion to the country’s gross domestic product (GDP), as per the government’s website.
  • It is also said to directly employ over 125,000 people.
  • As Canada becomes more mindful about its climate change goals, the automotive industry is also likely to see an increasing acceptance of electric vehicles (EV).

The Canadian auto industry is said to contribute about C$ 19 billion to the country’s gross domestic product (GDP), as per the government’s website. It is also said to directly employ over 125,000 people, and have 400,000 more employees in the extended services and networks.

As Canada becomes more mindful about its climate change goals, the automotive industry is also likely to see an increasing acceptance of electric vehicles (EV). This shift is expected to impact the industry significantly going forward.

Let us now look at five auto stocks that are likely to bring you gains.

  1. Linamar Corporation (TSX:LNR)

Linamar Corporation is in the business of selling automobile parts globally and is ranked among the 100 top automobile suppliers. Its business model is divided into industrial and transportation segments, which deliver manufacturing solutions worldwide.

Linamar stocks concluded trading at C$ 70.76 apiece on Monday, July 19, about 94 per cent above its 52-week low of C$ 36.54 (July 9, 2020).

The stock also climbed nearly 83 per cent in the last one year.

Linamar posted sales of C$ 1,781.9 million in Q1 2021, noting an increase of C$ 232.1 million or 15 per cent on a year-over-year (YoY) basis. The spike, the company said, resulted from an increase in volumes from Asia and North America, among other things.

The company paid a quarterly dividend of C$ 0.16 to its shareholders on June 8, 2021. Its three-year dividend growth rate stands at an average of 1.10 per cent.

  1. Magna International Inc. (TSX:MG)

Magna is an automobile technology company that engineers products like chassis, mirrors, roop systems, etc. It posts a market cap of about C$ 32 billion at the moment.

The company posted sales of US$ 10.2 billion in Q1 2021, up by 18 per cent year-over-year (YoY). This spike was mainly due to an 18 per cent increase in the global production of light vehicles and a nearly 87 per cent increase in business in China.

Its net income stood at US$ 615 million in the latest quarter.

Magna recently announced the launch of a new lighting technology that is set to be implemented in all-electric Volkswagen models in 2021.

The enterprise holds a return on equity (ROE) of 9.84 per cent and a return on assets (ROA) of 3.92 per cent, as per the TMX. It paid quarterly dividends of US$ 0.43 apiece on June 4, 2021.

  1. Taiga Motors Corporation (TSX:TAIG)

Taiga’s stocks closed at C$ 9.57 on July 19, about 28 per cent above its 52-week low of C$ 7.47 (June 22, 2021).

Taiga stocks began trading on the Toronto Stock Exchange (TSX) in April this year.

The auto stock climbed by nearly 19 per cent in the last one month and grew about nine per cent in the past week.

In June, the company announced that it has received a government funding of about US$ 50 million to set up an electric vehicle production facility in Quebec. 


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  1. AutoCanada Inc (TSX:ACQ)

 AutoCanada stock closed at a value of C$ 44.51 apiece on July 19, trading over 324 per cent above its 52-week low of C$ 10.49 (July 14, 2020). The company was posting a market cap of C$ 1.25 billion and total outstanding shares of about 27 million, as per TMX.

Its latest earnings report show a total revenue of C$ 969.8 million for Q1 2021, up 36.8 per cent YoY. The company noted that this was the highest first quarter topline ever recorded in its history.

Its net income in the latest quarter stood at C$ 21.3 million.

AutoCanada has a price-to-book (P/B) ratio of 3.476, and an EPS of 2.21.

  1. NFI Group Inc. (TSX:NFI)

 NFI Group Inc. is a Canadian company that manufactures and services automobiles. It operates under the manufacturing and the aftermarket divisions.

At a closing price of C$ 26.75 on July 19, NFI Group stock was trading nearly 86 per cent cent above its 52-week low of C$ 14.4 (August 7, 2020).

The stock climbed nearly 63 per cent in the last one year and grew by almost 70 per cent in the past nine months.

In Q1 2021, NFI posted total revenues of US$ 574.1 million. Its adjusted EBITDA stood at US$ 55 million in the latest quarter, while its EPS amounted to US$ 0.11.

The auto player distributed a quarterly dividend of C$ 0.212 apiece on July 15. It held a dividend yield of 3.17 per cent and a five-year dividend growth rate of 6.96 per cent.

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