Magna International (NYSE:MGA) - Share price, News & Analysis

MGA fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	3/6
Past Performance	3/6
Financial Health	5/6
Dividends	5/6

MGA Stock Overview

Magna International Inc. designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks worldwide.

Rewards

Trading at 56% below our estimate of its fair value

Earnings are forecast to grow 23.49% per year

Pays a reliable dividend of 2.99%

Risk Analysis

MGA passed our risk checks.

Magna International Competitors

Aptiv

NYSE:APTV

US$24.7b

BorgWarner

NYSE:BWA

US$9.0b

Lear

NYSE:LEA

US$7.6b

Gentex

NasdaqGS:GNTX

US$6.9b

Price History & Performance

Summary of all time highs, changes and price drops for Magna International
Historical stock prices
Current Share Price	CA$60.41
52 Week High	CA$104.28
52 Week Low	CA$54.60
Beta	1.49
1 Month Change	-1.71%
3 Month Change	-19.58%
1 Year Change	-36.66%
3 Year Change	35.12%
5 Year Change	33.92%
Change since IPO	3,291.44%

Recent News & Updates

May 17

Magna: Inflationary Pressures Continue To Dominate

Magna received a buy rating and a $75 price target when we last covered the stock. We look at the recently released results and the changed guidance. The challenges are real and we see more room for guidance cuts in the quarters ahead.

Shareholder Returns

	MGA	US Auto Components	US Market
7D	-4.5%	-7.0%	-4.0%
1Y	-36.7%	-35.1%	-13.2%

Return vs Industry: MGA underperformed the US Auto Components industry which returned -33.5% over the past year.

Return vs Market: MGA underperformed the US Market which returned -12.3% over the past year.

Price Volatility

Is MGA's price volatile compared to industry and market?
MGA volatility
MGA Average Weekly Movement	6.9%
Auto Components Industry Average Movement	8.8%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: MGA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: MGA's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1957	161,000	Swamy Kotagiri	https://www.magna.com

Magna International Inc. designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks worldwide. It operates through four segments: Body Exteriors & Structures, Power & Vision, Seating Systems, and Complete Vehicles. The Body Exteriors & Structures segment provides body and chassis, exterior, and roof systems, as well as battery enclosures and engineering and testing services, including fascia and trims, front end modules, front integration panels, liftgate modules, active aerodynamics, engineered glass, running boards, truck bed access products, and side doors.

Magna International Fundamentals Summary

How do Magna International's earnings and revenue compare to its market cap?
MGA fundamental statistics
Market Cap	US$17.60b
Earnings (TTM)	US$1.26b
Revenue (TTM)	US$35.71b

13.9x

P/E Ratio

0.5x

P/S Ratio

Is MGA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MGA income statement (TTM)
Revenue	US$35.71b
Cost of Revenue	US$30.84b
Gross Profit	US$4.87b
Other Expenses	US$3.61b
Earnings	US$1.26b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	4.32
Gross Margin	13.64%
Net Profit Margin	3.54%
Debt/Equity Ratio	30.1%

How did MGA perform over the long term?

See historical performance and comparison

Dividends

3.0%

Current Dividend Yield

42%

Payout Ratio

Valuation

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

Valuation Score

6/6

Valuation Score 6/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: MGA ($60.41) is trading below our estimate of fair value ($137.23)

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

Price To Earnings Ratio

PE vs Industry: MGA is good value based on its Price-To-Earnings Ratio (13.9x) compared to the US Auto Components industry average (14.5x).

PE vs Market: MGA is good value based on its Price-To-Earnings Ratio (13.9x) compared to the US market (15.1x).

Price to Earnings Growth Ratio

PEG Ratio: MGA is good value based on its PEG Ratio (0.6x)

Price to Book Ratio

PB vs Industry: MGA is good value based on its Price-To-Book Ratio (1.5x) compared to the US Auto Components industry average (1.7x).

Future Growth

How is Magna International forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

23.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGA's forecast earnings growth (23.5% per year) is above the savings rate (1.9%).

Earnings vs Market: MGA's earnings (23.5% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MGA's revenue (6.2% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: MGA's revenue (6.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MGA's Return on Equity is forecast to be low in 3 years time (17.3%).

Past Performance

How has Magna International performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-15.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MGA has high quality earnings.

Growing Profit Margin: MGA's current net profit margins (3.5%) are higher than last year (3.3%).

Past Earnings Growth Analysis

Earnings Trend: MGA's earnings have declined by 15.1% per year over the past 5 years.

Accelerating Growth: MGA's earnings growth over the past year (13.7%) exceeds its 5-year average (-15.1% per year).

Earnings vs Industry: MGA earnings growth over the past year (13.7%) underperformed the Auto Components industry 24.5%.

Return on Equity

High ROE: MGA's Return on Equity (10.9%) is considered low.

Financial Health

How is Magna International's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MGA's short term assets ($13.6B) exceed its short term liabilities ($10.4B).

Long Term Liabilities: MGA's short term assets ($13.6B) exceed its long term liabilities ($6.3B).

Debt to Equity History and Analysis

Debt Level: MGA's net debt to equity ratio (13.6%) is considered satisfactory.

Reducing Debt: MGA's debt to equity ratio has increased from 28.1% to 30.1% over the past 5 years.

Debt Coverage: MGA's debt is well covered by operating cash flow (67.8%).

Interest Coverage: MGA's interest payments on its debt are well covered by EBIT (20.7x coverage).

Balance Sheet

Dividend

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

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.99%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MGA's dividend (2.99%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: MGA's dividend (2.99%) is low compared to the top 25% of dividend payers in the US market (4.05%).

Stability and Growth of Payments

Stable Dividend: MGA's dividends per share have been stable in the past 10 years.

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (41.7%), MGA's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (49.6%), MGA's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure

CEO

Swamy Kotagiri

1.33yrs

Tenure

US$10,870,000

Compensation

Mr. Seetarama Swamy Kotagiri, also known as Swamy, M.Sc., serves as Chief Executive Officer and Director at Magna International Inc. since January 1, 2021. He served as President at Magna International Inc...

CEO Compensation Analysis

Compensation vs Market: Swamy's total compensation ($USD10.87M) is about average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: Swamy's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: MGA's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.

Board Members

Experienced Board: MGA's board of directors are considered experienced (4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: MGA insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31