Magna Has Raised Its Dividend 15 Straight Years

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 moatworthy returns on invested capital due to multiple 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.