TSX:MG

Stock Analysis Report

Magna International

Executive Summary

Magna International Inc. designs, develops, and manufactures automotive systems, assemblies, modules, and components in North America, Europe, Asia Pacific, and internationally.


Snowflake Analysis

Excellent balance sheet, good value and pays a dividend.


Similar Companies

Share Price & News

How has Magna International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.0%

MG

1.2%

CA Auto Components

1.2%

CA Market


1 Year Return

6.0%

MG

4.2%

CA Auto Components

9.6%

CA Market

Return vs Industry: MG exceeded the Canadian Auto Components industry which returned 3.4% over the past year.

Return vs Market: MG underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

MGIndustryMarket
7 Day3.0%1.2%1.2%
30 Day-3.3%-4.2%2.6%
90 Day2.2%3.0%6.0%
1 Year9.2%6.0%7.1%4.2%13.1%9.6%
3 Year36.3%26.2%5.4%-4.7%17.1%6.4%
5 Year35.5%20.2%19.6%3.7%36.1%16.0%

Price Volatility Vs. Market

How volatile is Magna International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Magna International undervalued compared to its fair value and its price relative to the market?

33.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MG (CA$69.83) is trading below our estimate of fair value (CA$96.7)

Significantly Below Fair Value: MG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MG is good value based on its PE Ratio (9.6x) compared to the Auto Components industry average (13.7x).

PE vs Market: MG is good value based on its PE Ratio (9.6x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: MG is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: MG is overvalued based on its PB Ratio (1.6x) compared to the CA Auto Components industry average (1x).


Next Steps

Future Growth

How is Magna International forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

9.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MG's forecast earnings growth (7% per year) is above the savings rate (1.4%).

Earnings vs Market: MG's earnings (7% per year) are forecast to grow slower than the Canadian market (10.3% per year).

High Growth Earnings: MG's earnings are forecast to grow, but not significantly.

Revenue vs Market: MG's revenue (2.2% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: MG's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MG's Return on Equity is forecast to be low in 3 years time (18.4%).


Next Steps

Past Performance

How has Magna International performed over the past 5 years?

4.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MG has high quality earnings.

Growing Profit Margin: MG's current net profit margins (4.4%) are lower than last year (5.9%).


Past Earnings Growth Analysis

Earnings Trend: MG's earnings have grown by 4.8% per year over the past 5 years.

Accelerating Growth: MG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MG had negative earnings growth (-25.8%) over the past year, making it difficult to compare to the Auto Components industry average (-3.4%).


Return on Equity

High ROE: MG's Return on Equity (15.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Magna International's financial position?


Financial Position Analysis

Short Term Liabilities: MG's short term assets ($11.5B) exceed its short term liabilities ($9.5B).

Long Term Liabilities: MG's short term assets ($11.5B) exceed its long term liabilities ($5.9B).


Debt to Equity History and Analysis

Debt Level: MG's debt to equity ratio (32.8%) is considered satisfactory.

Reducing Debt: MG's debt to equity ratio has increased from 11.9% to 32.8% over the past 5 years.

Debt Coverage: MG's debt is well covered by operating cash flow (108.5%).

Interest Coverage: MG's interest payments on its debt are well covered by EBIT (28.2x coverage).


Balance Sheet

Inventory Level: MG has a high level of physical assets or inventory.

Debt Coverage by Assets: MG's debt is covered by short term assets (assets are 3.2x debt).


Next Steps

Dividend

What is Magna International's current dividend yield, its reliability and sustainability?

2.66%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%1.9%markettop25%5.4%industryaverage1.9%forecastin3Years3.1%

Current dividend yield vs market & industry

Notable Dividend: MG's dividend (2.73%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: MG's dividend (2.73%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

Stable Dividend: MG's dividend payments have been volatile in the past 10 years.

Growing Dividend: MG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.3%), MG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MG's dividends in 3 years are forecast to be well covered by earnings (23.2% payout ratio).


Next Steps

Management

What is the CEO of Magna International's salary, the management and board of directors tenure and is there insider trading?

9.4yrs

Average management tenure


CEO

Don Walker (62yo)

9.2yrs

Tenure

US$20,073,000

Compensation

Mr. Donald James Walker, also known as Don, PEng, has been the Chief Executive Officer of Magna International Inc. since November 15, 2010. Mr. Walker served as Co-Chief Executive Officer of Magna Internat ...


CEO Compensation Analysis

Compensation vs Market: Don's total compensation ($USD20.07M) is above average for companies of similar size in the Canadian market ($USD7.32M).

Compensation vs Earnings: Don's compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.4yrs

Average Tenure

Experienced Management: MG's management team is seasoned and experienced (9.4 years average tenure).


Board Age and Tenure

6.7yrs

Average Tenure

63yo

Average Age

Experienced Board: MG's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

Insider Buying: MG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellCA$1,055,34002 Jan 20
Donald Walker
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares14,300
Max PriceCA$73.80
SellCA$1,093,90621 Dec 19
Donald Walker
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares14,800
Max PriceCA$73.91
SellCA$1,700,44021 Dec 19
Vincent Galifi
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares22,900
Max PriceCA$74.26
SellCA$926,72420 Dec 19
James Tobin
EntityIndividual
Role
Head of Marketing
Chief Marketing Officer & President of Magna Asia
Shares12,621
Max PriceCA$73.43
SellCA$3,676,50015 Nov 19
Donald Walker
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares50,000
Max PriceCA$73.53
SellCA$4,075,50911 Sep 19
Vincent Galifi
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares58,000
Max PriceCA$70.27
SellCA$6,629,45009 Sep 19
Donald Walker
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares100,000
Max PriceCA$68.97
SellCA$580,94925 Jun 19
James Tobin
EntityIndividual
Role
Head of Marketing
Chief Marketing Officer & President of Magna Asia
Shares9,000
Max PriceCA$64.55
SellCA$328,66721 Mar 19
James Tobin
EntityIndividual
Role
Head of Marketing
Chief Marketing Officer & President of Magna Asia
Shares5,002
Max PriceCA$65.71
SellCA$4,930,06504 Mar 19
Donald Walker
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares70,500
Max PriceCA$69.93
SellCA$7,682,22025 Feb 19
Tommy Skudutis
EntityIndividual
Role
Chief Operating Officer
Executive VP
Shares124,726
Max PriceCA$71.03

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Vincent Galifi (59yo)

    Executive VP & CFO

    • Tenure: 22.1yrs
    • Compensation: US$8.86m
  • Don Walker (62yo)

    CEO & Director

    • Tenure: 9.2yrs
    • Compensation: US$20.07m
  • Tom Skudutis

    Executive VP

    • Tenure: 12.7yrs
    • Compensation: US$8.57m
  • Riccardo Trecroce

    Executive VP & Chief Legal Officer

    • Tenure: 1.7yrs
  • Louis Tonelli

    Vice President of Investor Relations

    • Tenure: 16.2yrs
  • Jim Tobin

    Chief Marketing Officer & President of Magna Asia

    • Tenure: 9.7yrs
    • Compensation: US$3.21m
  • Tracy Fuerst

    Global Director Corporate Communications & PR

    • Swamy Kotagiri

      Executive VP

      • Tenure: 6yrs
      • Compensation: US$5.00m
    • Joanne Horibe

      Chief Compliance Officer & VP of Ethics

      • Aaron McCarthy

        Executive VP & Chief Human Resources Officer

        • Tenure: 1yrs

      Board Members

      • Bill Young (64yo)

        Independent Chairman of the Board

        • Tenure: 7.7yrs
        • Compensation: US$500.00k
      • Rob MacLellan (64yo)

        Independent Director

        • Tenure: 1.7yrs
        • Compensation: US$135.00k
      • Don Walker (62yo)

        CEO & Director

        • Tenure: 9.2yrs
        • Compensation: US$20.07m
      • Bill Ruh (57yo)

        Independent Director

        • Tenure: 2.7yrs
        • Compensation: US$264.00k
      • Scott Bonham (57yo)

        Non-Independent & Non-Executive Director

        • Tenure: 7.7yrs
        • Compensation: US$822.00k
      • Kurt Lauk (72yo)

        Independent Director

        • Tenure: 8.7yrs
        • Compensation: US$275.00k
      • Cindy Niekamp (59yo)

        Independent Director

        • Tenure: 5.7yrs
        • Compensation: US$222.00k
      • Indira Samarasekera (66yo)

        Independent Director

        • Tenure: 5.7yrs
        • Compensation: US$258.00k
      • Mary Shio Chan (56yo)

        Independent Director

        • Tenure: 2.4yrs
        • Compensation: US$234.00k
      • Peter Bowie (72yo)

        Independent Director

        • Tenure: 7.7yrs
        • Compensation: US$239.00k

      Company Information

      Magna International Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Magna International Inc.
      • Ticker: MG
      • Exchange: TSX
      • Founded: 1957
      • Industry: Auto Parts and Equipment
      • Sector: Automobiles
      • Market Cap: CA$21.609b
      • Shares outstanding: 305.91m
      • Website: https://www.magna.com

      Number of Employees


      Location

      • Magna International Inc.
      • 337 Magna Drive
      • Aurora
      • Ontario
      • L4G 7K1
      • Canada

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      MGANYSE (New York Stock Exchange)YesCommon SharesUSUSDFeb 1977
      MGTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 1977
      MGADB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 1977
      MGA NBMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNFeb 1977
      MGSWX (SIX Swiss Exchange)YesCommon SharesCHCHFFeb 1977

      Biography

      Magna International Inc. designs, develops, and manufactures automotive systems, assemblies, modules, and components in North America, Europe, Asia Pacific, and internationally. The Body Exteriors & Structures segment provides body structures; chassis structures, such as frame and structural assemblies, chassis subframes, and suspension systems; exterior systems and modules, including hoods, roofs, door panels, front end modules, liftgate modules, polycarbonate roof panels, liftgate sensor integration systems, and fascia; trim and automotive jewelry comprises engineered glass, trim and roof racks, and running boards; non-visible and visible active grille shutters, active air deflectors, and underbody panels; and fuel systems, pipes and components, and alternative energy storage systems. Its Power & Vision segment offers manual, hybrid, and dual-clutch transmissions systems; mild hybrid solutions; high voltage edrives and electrified components; chassis, glow plug control, powertrain control, and mechatronic control modules; four-wheel drive, all-wheel drive, and disconnect systems; thermal management and lubrication systems; transmission clutch/carrier components, precision stampings and shafts, and automated driving systems; latching systems, door modules, power closures, hinges and wireforming, and handles; interior and exterior mirrors, and actuators; and front and rear lighting, tail lamps, and other lighting products. The Seating Systems segment provides recliners, manual and power adjusters, and seat structures. Its Complete Vehicles segment offers modular solutions for system and parts, as well as complete vehicle manufacturing services. The company serves original equipment manufacturer and non-automotive customers, as well as tier 1 companies, and medium and heavy truck manufacturers. Magna International Inc. was founded in 1957 and is based in Aurora, Canada. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/17 23:36
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.