The stock market is currently a strange place. While all equities are struggling, it has also given an opportunity to make the most of the dip in promising stocks. The government is at war against inflation and is taking all the necessary steps to keep it in control. Amidst all this, the auto industry has come to the limelight and the stocks have fallen through some support levels, making them a solid buy. The industry’s troubles are far from over, but the second half of the year could be a chance to plan for the future instead of worrying about the short-term supply chain concerns.
The economy will revive in the long term and we will see the stocks picking up pace. Until then, it is time to invest and hold these three auto stocks for long-term gains. Some also pay solid dividends to keep your cash flow consistent.
Here are three auto stocks to buy and hold forever:
| Ticker | Company | Price |
| TM | Toyota Motor Corporation | $158.62 |
| GM | General Motors Company | $34.05 |
| RACE | Ferrari N.V. | $198.40 |
Auto Stocks to Buy and Hold: Toyota Motor (TM)
The first in my list of top auto stocks to buy and hold forever is Toyota Motor (NYSE:TM). A global leader with a solid hold in the industry, Toyota has seen its business booming for many years consistently. 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 dropping, which means it is a good time to make your move.
Toyota has generated impressive revenue numbers despite the pandemic and reported $245 billion in revenue in 2021. Further, it reported $33 billion in cash from operations, which it can use for research and development purposes. Toyota continues to remain the king of the auto industry and it has a dividend yield of 2.79%. With a history of more than six decades, Toyota is ready to become an electric vehicle (EV) play. It is spending $35 billion on EVs and intends to sell 3.5 million units across the world 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 move to invest in TM stock while it is trading at a discount.
General Motors (GM)
General Motors (NYSE:GM) is a well-known name in the automotive sector and is known for the internal combustion engine vehicles. The company is moving toward EVs and aims to become the top EV seller in the next few years. While it might take time for that to happen, GM stock does look promising today. The company aims to spend $35 billion in EV investments by 2025.
Unfortunately, the stock started the downward journey in 2020 and wasn’t able to hit $50 until early 2021. It picked pace up then and went as high as $67, falling soon after. Currently, it is sitting at $34, much lower than the highs it was once enjoying. However, the share has great potential and it could become 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 plants, moving toward EV infrastructure expansion, and aims to launch 30 new EVs globally in the next few years. GM stock might be down today, but it is not out. It remains one of the top auto stocks to buy and hold forever.
Auto Stocks to Buy and Hold: Ferrari (RACE)
The list of promising auto stocks to buy and hold forever remains incomplete without Ferrari (NYSE:RACE). An iconic brand, Ferrari has gained a stronghold in the industry and looks promising. The company has shown steady improvement in its financials and the revenue has grown even during the pandemic. RACE stock is down 10% over the past six months and is trading at $198 today, much lower than the highs of $278.
When it comes to production, Ferrari is all about quality over quantity and demand has never been an issue. It caters to the luxury segment and is known for its fine performance and design. The company can sell every vehicle it makes, which is a solid reason to bet on RACE stock. It intends to enter the EV segment with a supercar by 2025. If the stock continues to fall, you might get a better bargain, but the current level can be a decent start. RACE stock is the one to buy and hold for the long term.
It is also a favorite of analysts. Morgan Stanley (NYSE:MS) analyst Adam Jonas believes that the stock could go as high as $350 for its EV potential. Ferrari is taking all the necessary steps to ensure that it is in the EV market in the right manner. It expects to have as much as 60% of the cars in hybrid or fully electric over the next four years. The long-term picture of Ferrari looks highly attractive and promising.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
