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Magna International Inc MGA

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Stock XNYS Rating as of
$45.21 +0.60 (1.35%)
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Company Report

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Magna Is One of the Largest Auto Suppliers in the World, Offering Many Products and Services

David Whiston

Magna International is one of the largest and most diversified auto parts suppliers in the world but that size is no guarantee of economic profit. While breadth in product and services can be advantageous regarding cross-selling—commercial activities that bolster content per vehicle and market penetration—we don’t see margins getting high enough to merit moat worthy return on invested capital due to numerous competitors in Magna’s largest segments. The company enjoys customer switching costs, which are common to auto suppliers with moats, but its financial performance does not quite merit one.

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Price vs Fair Value

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MGA is trading at a 530% premium.
Price
$45.21
Fair Value
$37.00
Uncertainty
High
1-Star Price
$114.17
5-Star Price
$98.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

High switching costs often enable sticky market shares for auto suppliers.

Bears

Magna relies heavily on a handful of automakers with its top six customers accounting for 76% of total 2023 revenue. Asian automakers can be hard to gain share with.

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News

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Trading Information

Previous Close Price
$44.61
Day Range
$44.23–45.31
52-Week Range
$43.96–65.27
Bid/Ask
$43.80 / $45.50
Market Cap
$12.99 Bil
Volume/Avg
1.8 Mil / 1.9 Mil

Key Statistics

Price/Earnings (Normalized)
8.44
Price/Sales
0.30
Dividend Yield (Trailing)
4.19%
Dividend Yield (Forward)
4.26%
Total Yield
4.25%

Company Profile

Magna International prides itself on a highly entrepreneurial culture and a corporate constitution that outlines distribution of profits to various stakeholders. This automotive supplier's product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contract vehicle assembly. In 2023, 48% of Magna's $42.8 billion of revenue came from North America while Europe accounted for approximately 38% and Asia the remainder. The firm's top six customers constituted 76% of revenue with the top three being GM, Mercedes, and BMW. GM was the largest contributor at 14%. The company was founded in 1957, has over 179,000 employees, and is based in Aurora, Ontario.
Sector
Consumer Cyclical
Industry
Auto Parts
Stock Style Box
Large Value
Total Number of Employees
179,000
Website
https://www.magna.com

Competitors

Valuation

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Metric
MGA
ADNT
BWA
Price/Earnings (Normalized)
 8.4412.728.37
Price/Book Value
 1.131.221.41
Price/Sales
 0.300.170.54
Price/Cash Flow
 4.405.585.87
Price/Earnings
MGA
ADNT
BWA

Financial Strength

Metric
MGA
ADNT
BWA
Quick Ratio
 0.730.771.12
Current Ratio
 1.091.131.54
Interest Coverage
 5.682.0133.88
Quick Ratio
MGA
ADNT
BWA

Profitability

Metric
MGA
ADNT
BWA
Return on Assets (Normalized)
 4.85%4.41%5.56%
Return on Equity (Normalized)
 13.50%18.90%13.22%
Return on Invested Capital (Normalized)
 8.85%10.90%8.12%
Return on Assets
MGA
ADNT
BWA
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