3 auto stocks to buy and hold forever
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The stock market is a strange place right now. While all stocks are struggling, it has also provided an opportunity to make the most of falling promising stocks. The government is at war against inflation and is taking all necessary measures to control it. Amid all of this, the auto industry is in the spotlight and stocks have fallen to some support levels, making it a solid buy. The industry’s troubles are far from over, but the second half of the year could be a time to plan for the future instead of worrying about short-term supply chain issues.
The economy will recover in the long term and we will see stocks pick up. Until then, it’s time to invest and hold on to these three auto stocks for long-term gains. Some also pay strong dividends to keep your cash flow consistent.
Here are three auto stocks to buy and hold forever:
|MT||Toyota Motor Corporation||$158.62|
|GM||General Motors Company||$34.05|
Auto stocks to buy and hold: Toyota Motor (TM)
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The first on my list of the best auto stocks to buy and hold forever is Toyota engine (NYSE:MT). A global leader with a strong foothold in the industry, Toyota has seen its business thrive steadily for many years. It has an impressive product lineup and strong fundamentals. TM stock is trading around $159 today, down 17% over the past six months. The stock was trading at highs of $213 in January 2022 but has been steadily falling, meaning now is a good time to move.
Toyota has generated impressive revenue numbers despite the pandemic and reported $245 billion in revenue in 2021. Additionally, it reported $33 billion in cash from operations, which it can use for research and development. Toyota continues to be the king of the auto industry and its dividend yield is 2.79%. With a history spanning over six decades, Toyota is poised to become an electric vehicle (EV) game. It spends $35 billion on electric vehicles and aims to sell 3.5 million units worldwide by the end of 2030.
TM stock has the potential to go much higher from the current level and it has a history of outperforming the broader market in recent years. I think it could be a great decision to invest in TM shares as they are trading at a discount.
General Motors (GM)
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General Motors (NYSE:GM) is a household name in the automotive industry and is known for internal combustion engine vehicles. The company is turning to electric vehicles and aims to become the number one seller of electric vehicles in the next few years. Although it may take time, GM’s stock looks promising today. The company aims to spend $35 billion on investments in electric vehicles by 2025.
Unfortunately, the stock began its descent in 2020 and was only able to reach $50 in early 2021. It then accelerated and reached $67, dropping soon after. Currently, it sits at $34, well below the highs it once enjoyed. However, the share has great potential and it could go strong in the next few years.
The company is moving in the right direction, has enough cash and the leadership is exceptional. It is building new battery factories, moving towards expanding electric vehicle infrastructure, and aiming to launch 30 new electric vehicles globally in the next few years. GM stock may be down today, but it’s not out. It remains one of the best auto stocks to buy and hold forever.
Auto stocks to buy and hold: Ferrari (RACE)
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The list of promising auto stocks to buy and hold forever remains incomplete without Ferrari (NYSE:RACE). An iconic brand, Ferrari has established itself in the industry and looks promising. The company has shown steady improvement in its finances and revenue has increased even during the pandemic. RACE stock is down 10% in the past six months and is trading at $198 today, well below highs of $278.
When it comes to production, Ferrari favors quality over quantity and demand has never been an issue. It caters to the luxury segment and is known for its refined performance and design. The company can sell all the vehicles it manufactures, which is a good reason to bet on RACE shares. It aims to enter the EV segment with a supercar by 2025. If the stock continues to drop, you might get a better deal, but the current level may be a good start. RACE stock is the one to buy and hold for the long term.
It is also a favorite of analysts. Morgan Stanley (NYSE:MRS), analyst Adam Jonas believes the stock could hit $350 for its potential EV. Ferrari is taking all the necessary steps to ensure that it is in the electric vehicle market in the right way. He expects up to 60% of cars to be hybrid or fully electric in the next four years. Ferrari’s long-term image looks very attractive and promising.
At the date of publication, Vandita Jadeja did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
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