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Electric vehicle (EV) stocks are Wall Street darlings of Wall Street. Many of these stocks have notched record highs in recent weeks. Today, we’ll take a look at 7 robust EV stocks that could bring holiday cheer to any long-term portfolio.
The International Energy Agency (IEA) says that, “the Covid-19 pandemic is causing a major shock to the global economy. Electric cars – a key element of transitions to cleaner energy – are being affected in key markets. But despite the crisis, their sales could reach a record share of the overall car market this year.”
According to BloombergNEF, “by 2022 there will be over 500 different EV models available globally. Consumer choice and competitive pricing will be key to attracting new buyers to the market… By 2040, over half of all passenger vehicles sold will be electric. Markets like China and parts of Europe achieve much higher penetrations, but lower adoption in emerging markets reduces the global average.”
- Global X Lithium & Battery Tech ETF (NYSEARCA:LIT)
- Honda Motor (NYSE:HMC)
- Invesco Dynamic Semiconductors ETF (NYSEARCA:PSI)
- Nio (NYSE:NIO)
- SPDR S&P Kensho Smart Mobility ETF (NYSEARCA:HAIL)
- Tesla (NASDAQ:TSLA)
- Volkswagen (OTCMKTS:VWAGY)
Ebbs and flows in our economy could understandably affect revenues of EV makers as well as companies in related industries. However, the robust companies and leaders in the sector have tailwinds behind them. And secular trends, i.e. growing consumer interest in alternative energy vehicles, will propel these businesses forward.
Electric Vehicle Stocks To Buy: Global X Lithium & Battery Tech ETF (LIT)
52-Week Range: $17.83 – $54.69
Year-to-date (YTD) change: Up 98.45%
Dividend Yield: 0.82%
Expense Ratio: 0.75%
Our first choice today is the Global X Lithium & Battery Tech ETF, which provides access to global businesses that focus on lithium. Their operations range from mining and refining lithium to manufacturing lithium batteries, which have been in high demand due to increased EV sales.
InvestorPlace readers likely know that battery costs affect the final sales price of any electric car. Thus, any discussion on EV stocks would also benefit from paying attention to companies engaged in the manufacturing lithium batteries.
LIT, which has 41 holdings, tracks the Solactive Global Lithium Index. This fund started trading in July 2020 and net assets stand close to $1.4 billion. From a geographic standpoint, China-based companies top the list with 43.3%, followed by the U.S. (22%), South Korea (11.7), and Japan (6.7%), among others.
The top five names, Albemarle (NYSE:ALB), Ganfeng Lithium, LG Chem (OTCMKTS:LGCLF), Samsung and Tesla comprise close to 34% of the fund. So far in 2020, the fund is up over 98% and hit a record high in early December.
Given the recent run-up in the price of the fund, short-term profit-taking could well be around the corner. However, the bull trend in batteries will likely continue into 2021 as well.
Honda Motor (HMC)
Source: Jonathan Weiss / Shutterstock.com
52-Week Range: $19.38 – $30.21
YTD change: Up 5.31%
Dividend Yield: 2.66%
Japanese Honda Motor is well known for its motor products, ranging from small general-purpose engines to specialty sports cars. The Accord, Civic, CRV and Acura lines have been on global roads for decades. In September Honda and General Motors (NYSE:GM) agreed to collaborate in North America to build “on successful collaboration in electrified vehicles and technologies,” which they have had in place for several years now.
In early November, the car maker announced announced FY2020 Q2 earnings metricsand the fiscal first half-year results ended September 30. Quarterly sales revenue decreased by 2.1% YoY. But investors were pleased to see that profit before income taxes increased by 19.4% from the same period last year.
Since the start of the year, HMC stock is up more than 5% and hit a 52-week high in early December. Forward P/E and P/S ratios are 9.88 and 0.42, respectively. Long-term investors could consider buying the shares, especially if there is a decline toward $28. Honda Motors is likely to increase its emphasis on EV cars in the quarters ahead.