Best Car Companies to Invest in Right Now
Five of the best car companies on the stock market
“Buy the dip.”
This investing colloquialism has never been more germane as we reach the midpoint of 2022. Stocks have taken a beat down all year along — especially today — with the car industry being one of the worst flops on record.
This makes now a perfect time to invest in some of the best car companies out there. After all, many of these companies still have strong price-to-earnings ratios and strong innovations coming next year. They will bounce back.
Here are five of the best car companies to invest in right now.
1. Ford (NYSE: F)
Current Stock Price: $14.16
Dividend Yield: $0.10 Per Share
52-Week Range: $11.14 — $25.87
The first company on our list is Ford. Currently, the company’s stock is down about 25% from where it was at the beginning of the year. This decline is due to a variety of factors, including the ongoing semiconductor shortage and concerns about future electric vehicle production. However, Ford is still one of the most profitable automakers in the world and is expected to rebound later this year, if not early 2023.
Investing in Ford now would be a great way to get the company at a discount. The automaker has a strong lineup of vehicles, including its popular F-150 truck, and is investing heavily in electric car manufacturing. Not to mention Ford also has one of the best dividend yields in the industry, making it a nice hold during a recession (which many experts say is guaranteed).
2. Stellantis (NYSE: STLA)
Current Stock Price: $13.37
Dividend Yield: N/A (Payout Ratio Not Available)
52-Week Range: $13.06 — $21.99
Formerly known as Fiat Chrysler Automobiles, Stellantis is one of the world’s largest automakers. The company was formed through a merger of Fiat Chrysler and Peugeot, creating a massive conglomerate with a strong portfolio of brands.
Stellantis is down about 48% from its 52-week high, making it one of the biggest decliners in the auto industry. As is the case across the entire industry, the company has been hurt by the global semiconductor shortage and concerns about future electric vehicle production. In addition, Stellantis has a large exposure to Europe, which has been struggling with a third wave of coronavirus infections as well as the ongoing Russia-Ukraine war.
Despite these challenges, Stellantis is still a very profitable company and is expected to rebound later this year. The stock is also attractively valued at less than six times earnings.
3. Tesla (NASDAQ: TSLA)
Current Stock Price: $870.83
Dividend Yield: N/A (Payout Ratio Not Available)
52-Week Range: $546.98 — $1,243.49
Oh boy.
Tesla is one of the most polarizing stocks on the market and it doesn’t help that Elon Musk just sold $8.5 billion of his own personal stock to cover his purchase of Twitter. All this said, there’s no denying that Tesla’s been a big winner in recent years.
Elon continues to dare investors to short Tesla. Maybe with a recession on its way this would be the best time to do so. But historically speaking, Tesla keeps winning.
Tesla’s recent run has been fueled by strong demand for electric vehicles as well as optimism about the company’s future growth prospects. Tesla is expected to continue growing at a rapid pace over the next few years as it ramps up production of its new Model Y SUV and expands into new markets like China and Europe.
All that said, Tesla is still a very risky stock. Maybe more so with a recession on the way. The company’s PE ratio is 118.15, four times that of Apple, and has a large amount of debt. In addition, Tesla faces stiff competition from established automakers like Ford and General Motors.
So, we’ll see.
4. Ferrari NV (NYSE: RACE)
Current Stock Price: $209.74
Dividend Yield: N/A (Payout Ratio Not Available)
52-Week Range: $165.09 — $230.70
Ferrari is one of the most prestigious automakers in the world and has a long history of producing high-performance sports cars. The company is based in Italy and is majority-owned by Fiat Chrysler.
There will always be strong demand for luxury vehicles, and this is what makes Ferrari a prudent investing option. Moreover, Ferrari is expected to continue growing at a rapid pace over the next few years as it expands into new markets like China and India.
5. Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B)
Current Stock Price: $484,340.00
Dividend Yield: N/A (Payout Ratio Not Available)
52-Week Range: $407,773–544,389
Wait, are allowed to count this?
Probably not. But our final does happen to be a stock backed by Berkshire called BYD Company (BYDDF). BYD is one of the strongest EV up and comers in the game. They are a Chinese electric vehicle and battery manufacturer that’s been around since 1995, but they’ve only recently started to get serious international attention.
They have over 30,000 employees and boast an impressive client list that includes Daimler AG, Audi AG, and Sears Holdings Corporation. They sell electric buses, cars, forklifts, trucks — you name it.
Oh, and did we mention that Berkshire Hathaway owns 25% of the company? Yeah, BYDs certainly moving in the right direction.
Final Thought
So there you have it! These are our picks for the best car companies to invest in right now in 2022. Stellantis, Tesla, Ferrari, and BYD Company all look like great opportunities to “buy the dip” as the stock market continues to crash over the next few weeks (months?).
At Leasly we’re committed to keeping our customers engaged in the car markets and financially educated down to companies we have in our own portfolios.
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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
