MAGNA INTERNATIONAL INC (MG.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MG - CA5592224011 - Common Stock
70.95 CAD
-1.78 (-2.45%)
We assign a fundamental rating of 4 out of 10 to MG. MG was compared to 5 industry peers in the Automobile Components industry. MG has an average financial health and profitability rating. MG has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally MG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- MG had positive earnings in the past year.
- In the past year MG had a positive cash flow from operations.
- In the past 5 years MG has always been profitable.
- MG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.14%, MG is in line with its industry, outperforming 60.00% of the companies in the same industry.
- MG's Return On Equity of 8.20% is amongst the best of the industry. MG outperforms 100.00% of its industry peers.
- MG's Return On Invested Capital of 7.07% is amongst the best of the industry. MG outperforms 100.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for MG is in line with the industry average of 6.17%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.14% | ||
| ROE | 8.2% | ||
| ROIC | 7.07% |
ROA(3y)3.05%
ROA(5y)3.4%
ROE(3y)8.13%
ROE(5y)8.77%
ROIC(3y)7.78%
ROIC(5y)7.41%
1.3 Margins
- MG has a Profit Margin (2.47%) which is comparable to the rest of the industry.
- In the last couple of years the Profit Margin of MG has declined.
- With a Operating Margin value of 4.76%, MG is not doing good in the industry: 80.00% of the companies in the same industry are doing better.
- MG's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 13.86%, MG is doing worse than 60.00% of the companies in the same industry.
- In the last couple of years the Gross Margin of MG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.76% | ||
| PM (TTM) | 2.47% | ||
| GM | 13.86% |
OM growth 3Y-1.98%
OM growth 5Y-3.67%
PM growth 3Y-17.39%
PM growth 5Y-12.05%
GM growth 3Y-1.57%
GM growth 5Y-0.26%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MG is destroying value.
- MG has less shares outstanding than it did 1 year ago.
- MG has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for MG has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 2.41 indicates that MG is not a great score, but indicates only limited risk for bankruptcy at the moment.
- MG has a Altman-Z score of 2.41. This is in the lower half of the industry: MG underperforms 60.00% of its industry peers.
- The Debt to FCF ratio of MG is 2.67, which is a good value as it means it would take MG, 2.67 years of fcf income to pay off all of its debts.
- MG has a Debt to FCF ratio (2.67) which is in line with its industry peers.
- A Debt/Equity ratio of 0.43 indicates that MG is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.43, MG is doing worse than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 2.67 | ||
| Altman-Z | 2.41 |
ROIC/WACC0.85
WACC8.29%
2.3 Liquidity
- MG has a Current Ratio of 1.18. This is a normal value and indicates that MG is financially healthy and should not expect problems in meeting its short term obligations.
- MG's Current ratio of 1.18 is on the low side compared to the rest of the industry. MG is outperformed by 80.00% of its industry peers.
- MG has a Quick Ratio of 1.18. This is a bad value and indicates that MG is not financially healthy enough and could expect problems in meeting its short term obligations.
- MG has a worse Quick ratio (0.83) than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
- MG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.97%.
- Measured over the past years, MG shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.22% on average per year.
- MG shows a decrease in Revenue. In the last year, the revenue decreased by -2.04%.
- MG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.67% yearly.
EPS 1Y (TTM)3.97%
EPS 3Y1.79%
EPS 5Y-2.22%
EPS Q2Q%3.91%
Revenue 1Y (TTM)-2.04%
Revenue growth 3Y5.73%
Revenue growth 5Y1.67%
Sales Q2Q%1.77%
3.2 Future
- The Earnings Per Share is expected to grow by 10.17% on average over the next years. This is quite good.
- Based on estimates for the next years, MG will show a small growth in Revenue. The Revenue will grow by 1.00% on average per year.
EPS Next Y1.54%
EPS Next 2Y6.65%
EPS Next 3Y8.52%
EPS Next 5Y10.17%
Revenue Next Year-2.05%
Revenue Next 2Y-0.53%
Revenue Next 3Y0.56%
Revenue Next 5Y1%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 9.98, which indicates a very decent valuation of MG.
- MG's Price/Earnings is on the same level as the industry average.
- When comparing the Price/Earnings ratio of MG to the average of the S&P500 Index (28.60), we can say MG is valued rather cheaply.
- A Price/Forward Earnings ratio of 8.52 indicates a reasonable valuation of MG.
- 60.00% of the companies in the same industry are cheaper than MG, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, MG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.98 | ||
| Fwd PE | 8.52 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MG indicates a rather expensive valuation: MG more expensive than 80.00% of the companies listed in the same industry.
- MG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.24 | ||
| EV/EBITDA | 5.08 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MG does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)6.47
PEG (5Y)N/A
EPS Next 2Y6.65%
EPS Next 3Y8.52%
5. Dividend
5.1 Amount
- MG has a Yearly Dividend Yield of 3.68%. Purely for dividend investing, there may be better candidates out there.
- MG's Dividend Yield is a higher than the industry average which is at 2.62.
- Compared to an average S&P500 Dividend Yield of 1.82, MG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.68% |
5.2 History
- The dividend of MG has a limited annual growth rate of 5.84%.
- MG has paid a dividend for at least 10 years, which is a reliable track record.
- MG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.84%
Div Incr Years15
Div Non Decr Years15
5.3 Sustainability
- MG pays out 52.47% of its income as dividend. This is a bit on the high side, but may be sustainable.
- MG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP52.47%
EPS Next 2Y6.65%
EPS Next 3Y8.52%
MAGNA INTERNATIONAL INC / MG.CA FAQ
What is the fundamental rating for MG stock?
ChartMill assigns a fundamental rating of 4 / 10 to MG.CA.
What is the valuation status for MG stock?
ChartMill assigns a valuation rating of 4 / 10 to MAGNA INTERNATIONAL INC (MG.CA). This can be considered as Fairly Valued.
How profitable is MAGNA INTERNATIONAL INC (MG.CA) stock?
MAGNA INTERNATIONAL INC (MG.CA) has a profitability rating of 5 / 10.
What is the valuation of MAGNA INTERNATIONAL INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for MAGNA INTERNATIONAL INC (MG.CA) is 9.98 and the Price/Book (PB) ratio is 1.17.
What is the financial health of MAGNA INTERNATIONAL INC (MG.CA) stock?
The financial health rating of MAGNA INTERNATIONAL INC (MG.CA) is 4 / 10.