BorgWarner: EVs Drive Growth For Auto Parts Maker

Stock, Trading, Monitor, Business

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BorgWarner (BWA) — a major player in auto parts — has been a favorite of mine in the last few months, explains Chuck Carlson, a specialist in dividend reinvestment plans and the editor of DRIP Investor.

The firm is a major player in turbochargers and has been broadening its product mix in vehicle electrification to include e-motors, power electronics chargers, and battery systems. The company also has a strong position in transmission components.

BorgWarner expects to see big growth in the electric vehicle space over the next few years. It estimates that its “eProducts” will generate around $10 billion in sales by 2027.

I like the direction BorgWarner is heading. And I like the fact that the firm provides an under-the-radar way to play the EV revolution. As more people understand the company’s strengths in this space, demand for these shares should rise.

The stock represents an excellent way to build industrial exposure in a DRIP portfolio. Please note BorgWarner offers a direct-purchase plan. Minimum initial investment is $500. The plan administrator is Computershare.

To focus on its fastest-growing businesses, BorgWarner spun off Phinia (PHIN), which housed its fuel-systems and aftermarket businesses. BorgWarner shareholders received one share of Phinia for every five shares of BorgWarner held.

BorgWarner stock has behaved reasonably well since the spinoff. For investors who already own BorgWarner and now own Phinia shares, my inclination would be to sell the Phinia shares and use the proceeds to buy more BorgWarner stock.

About the Author

Charles Carlson is the CEO of Horizon Publishing, an investment newsletter publisher, and is also the CEO of Horizon Investment Services, a money management company. Horizon Investment Services is the sister company of Horizon Publishing Company, the publisher of Dow Theory Forecasts, Upside, and DRIP Investor newsletters.

Mr. Carlson is the editor of the DRIP Investor investment newsletter and is a contributing editor of Dow Theory Forecasts investment letter. He is the author of nine books, including the bestselling Eight Steps to Seven Figures (Doubleday), and his latest book, The Little Book of Big Dividends, published by John Wiley & Co.

Mr. Carlson's comments appear in such newspapers and magazines as the Wall Street Journal, the New York TimesUSA Today, Newsweek, US News & World Report, the Washington Post, and more. He also appears frequently on television and radio shows, including CNBC and CNN. Mr. Carlson is a Chartered Financial Analyst (CFA) who holds an undergraduate degree in journalism from Northwestern University and an MBA from the University of Chicago.

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