Best EV Stocks that Pay Dividends
With the steady growth of Electric Vehicles (EVs) in the automobile industry, early investors may start reaping higher benefits sooner than later. However, the general trend among technology companies is that they don’t normally pay dividends (Eg. Tesla). So, finding the best EV stocks that pay dividends can be an uphill climb.
Fortunately, we’ve rounded up the best picks based on in-depth research and expert advice. So, you don’t have to go through the gruelling process of researching and identifying these companies.
But before we really get into the details of which EV stocks to choose, let’s get an understanding of the basics first.
What are EV stocks?
EV stocks are the stocks of those companies that design, create, develop, and produce electric vehicles, including their associated components. So, EV
stocks do not only cover manufacturers of electric cars. They may include developers of batteries, battery chargers, charging stations, and related
EV stocks were among the best-performing stocks in the world for the past year. So, it makes sense to invest in it right now. So, it makes sense to invest in this new market because the prospects look bright.
Also, with the world gradually making the shift to green and renewable fuel, the EV market and stocks are bound to see growth in the coming years. So, investing in reliable EV stocks that pay dividends can be a wise move right now.
Do all EV stocks pay dividends?
No. Most EV stocks do not offer regular dividends to their shareholders. In fact, technology companies are notorious for not paying out dividends. The main reason is that these companies have to reinvest their earnings into the company.
If you know anything about EV markets, you know that industry giants like Tesla seem to be enjoying all the limelight. If you consider how Tesla has grown over the last 5-6 years, they seem to be breaking records in terms of growth. But most of their total revenue goes back into operations costs and capital expenditure. So, you could say that their operating profit isn’t really enough to pay dividends.
Another example of an EV giant not paying dividends is NIO Limited. While other players in the automobile industry suffered during the pandemic, this Chinese EV manufacturer experienced incredible growth.
With a market cap of over $70 Billion, it’s in the company of tech giants who pay dividends. But NIO still refrains from starting a dividend payout. Like Tesla, they also redirect most of their total earnings to R&D, administrative expenses, and further development.
Top Picks for EV stocks that pay dividends
So, we know what EV stocks are and why some of the biggest EV brands do not pay dividends. Today, we’re interested in bringing out the EV stocks that do pay dividends.
Remember that these companies are all associated with products services that go into the EV industry. And the list is not in any particular order. Those aside, let’s look at some of the best dividend-paying EV stocks to invest in right now.
April is a renowned global tech company that focuses on sustainable technology in a wide range of niches. But their recent success has been in the automobile industry. The company excels in creating electronic systems and automated features in EVs based on green solutions and clean energy.
The Nasdaq Real-Time Price reveals that Aptiv stock price is hovering around the $140 mark at the moment. That makes it an affordable but valuable price for a growing EV stock.
Aptiv’s dividend yield has averaged around 1% steadily for several quarters now. The yield percentage isn’t very high. But the steady flow of dividends makes it a worthwhile investment in the long run. For most quarters of 2020, the dividend yield constantly stayed at $0.22.
Aptiv’s market cap is just short of $40 billion ($39.09 billion) right now. It’s a marked increase from the small beginnings that the company had in its initial years.
The company’s turnover suffered a little during mid-2020 because of the pandemic. But by Dec 2020, Aptiv’s total revenue already crossed $4.2 billion. As 2021 progresses, it looks like their total revenue will keep growing.
Aptiv’s current value is higher than 93% of the stocks in the US. So, it has an enviable position in the market as far as its worth is concerned.
BYD Company Ltd.
BYD is another EV stock that’s worth exploring, given the current scenario. BYD Co boasts of being a fast-growing, high-tech company. In the course of over 25 years, BYD has secured 30 industrial parks in a variety of locations around the world.
BYD deals with a wide range of new energy solutions and innovations. With the aim of creating a zero-emissions economy, BYD creates batteries, commercial vehicles, transits, and passenger cars that all run on renewable energy. And their EVs are among their most successful products. So, it’s a good example of stable EV stocks that pay dividends.
Their stocks currently range about $160 HKD (About $20 USD). Their dividend yield is projected to be about 0.11% for the first quarter of 2021.
The first number you notice here is the comparatively low yield percentage. But with BYD, it’s the steady flow of dividends that accumulates, not a one-time jackpot earning.
With a market cap of over $432 billion and a turnover of more than $180 billion, BYD is here to stay. So, although the yield percentage doesn’t seem all that high, it still looks like a good investment.
When we talk of EV stocks that pay dividends, General Motors usually isn’t the first choice. That’s because it’s normally known as a fuel-based auto-maker. However, General Motors has ramped up its EV program by envisioning over 30 new EV models by 2025. Although GM was generally known as a conventional auto-maker, their new EV plan puts them in the center of the sustainable market.
They plan to design, develop, and engineer EVs for different price points and a variety of styles. So, it’s a comprehensive program that covers software, batteries, manufacturing, and vehicle integration.
As a legacy automaker, General Motors has consistently delivered 3-5% dividend yields throughout 2016 – 2020. The stock price has decreased to about $57 since the pandemic hit. That’s why their dividend payments were temporarily suspended for some time. But with the positive outlook of their EV sector, you can expect them to resume again soon.
Despite pandemic woes, GM still enjoys a respectable market cap of $82 billion. And with a total turnover of over $137 billion, they’re still a top contender. Throughout 2019-20, their operating income ranged around the $5 billion mark. So, their position in the market is also still stable.
With their wide range of EV designs coming up, GM is definitely one of the EV stocks to look out for. However, you’ll have to wait till they decide to start paying dividends again. And given the current state of Covid-19 trends, we’re not sure when this may take place.
BorgWarner is an international supplier of auto parts that has its headquarters in Michigan. With a presence in over two dozen countries, BorgWarner is listed as one of the top 25 suppliers of auto parts in the world. So, its foray into the EV industry comes as no surprise.
BorgWarner manufactures a wide variety of components that go into making electric vehicles. Their portfolio includes motors, transmission, electronics, power management, etc. So, they may not manufacture entire electronic cars, but they supply most of the components. The advantage with suppliers like BorgWarner is that their business will continue even when EV brands come and go.
Their dividend yield hovers around 1.40%, which appears low at first. But their market cap has grown to almost $12 billion over the years. BorgWarner’s stocks currently cost about $49.26 in the market. That figure makes it one of the most affordable EV stocks that pay dividends.
Their gross profit for 2020 came to around $1.9 billion, which is about 18% of their total net worth.
As a Fortune 500 company, BorgWarner continues to climb the ranks of EV stocks. While most tech companies flake out on rewarding their shareholders with dividends, BorgWarner continues to deliver the goods. Given their healthy track record and enviable position in the market, BorgWarner is another EV stock that may be worth buying in the future.
Volkswagen, the maker of the iconic and classic Beetle, is also diving into the EV market. Their first electric SUV will hit Chinese markets by 2022. By 2023, they’ll roll out the ID 5 SUV-Coupe, and a much-awaited MPV will join in by 2024. So, it’s surely going to be a busy few years ahead for this German auto giant.
The good news here is that it’s an ideal opportunity for investing in their EV stocks. Their stock price recently closed in at $264, which is higher than some of the biggest names in the automobile industry. As their conventional cars already command this prestige in the market, their EV products may also follow suit.
By 2020 end, Volkwagen was already paying 1.82% as dividend yield to its holders. Their market cap stands at a whopping $124 billion. These numbers put Volkswagen among the best EV stocks that pay dividends.
Volkswagen’s total revenue crossed the $250 billion mark in recent years. The company revealed that the profits stood at about $14 billion after taxes. Also, till 2019, the company enjoyed the distinction of being the biggest car manufacturer when they overtook Toyota. If their EV products can replicate this success, their EV stocks will surely be worth the investment.
The Japanese automaker, Nissan, is not a new name in the EV industry. Their first electric vehicle, Tama, was released all the way back in 1947. By 1997, they released the Prairie Joy EV, the first EV in the world to be powered by lithium-ion batteries. By 2019, their all-electric Nissan Leaf became the highest-selling electric car (later replaced by Tesla’s Model 3).
Nissan’s stock price recently closed at $10.03, making it an affordable option for those who want to invest in EV stocks. The brand enjoys a market cap of almost $20 billion.
The company’s consolidated net revenue for 2020 was about $20 billion. Out of this, the company recorded about $24 million in terms of operating profit. So, as far as turnover goes, Nissan is doing pretty well by today’s standards.
Nissan’s dividend yield under industry is about 3.28%, with a payout ratio of about 17.38%. Those are pretty impressive numbers given the competition it faces from other big EV players. Although their yield is not as high as it was back in 2017-18, it’s still one of the higher percentages if you consider the competitors.
With the 2021 Nissan Ariya already in the market, their EV prospects look brighter than ever. Investing in EV stocks can involve a lot of risks. But those risks are lowered with a reliable and time-tested brand like Nissan.
NextEra Energy Resources
We can’t talk of electric vehicles without considering power suppliers. NextEra Energy Resources is currently among the top generators of electric power in the region. It’s one of the world’s biggest providers of battery storage from renewable energy sources.
Apart from their other great numbers, NextEra truly stands out because of its impressive dividend yield of 3.31%. That amounts to about $2.48 on every yield. NextEra has provided its shareholders with a consistent increase in dividends for over six years now. In the last three years alone, NextEra’s dividend growth surged by over 51%.
NextEra’s market cap is currently at $150 billion, with an individual share worth about $76 in the last closing. The company records its net income as $1.67 billion in the last year. This figure is more than double its profits from the previous year when it netted about $421 million. So, there’s no doubt that NextEra can be among the best EV stocks that pay dividends.
The future of tech and automobiles will invariably make a move towards clean energy. The shift has already started. And companies like NextEra Energy Partners are at the helm of this transition.
Regardless of who manufactures the EVs, these energy solutions will always be required. Given these bright prospects, NextEra’s position in the market is almost cemented. So, investors who get a piece of this growing company may stand to reap great benefits later on.
Investing in EV stocks that pay dividends can be tricky. There’s always some risk involved, and no single stock is a guarantee for every season. However, with the right insights and market research, your investments can stand a much better chance.
Today, we’ve covered all the relevant information and upcoming stocks so that your decision is easier and more fruitful.