Magna International Inc (NYSE: MGA)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0000749098
Market Cap 15.86 Bn
P/B 1.26
P/E 15.36
P/S 0.38
ROIC (Qtr) 5.57
Div Yield % 3.43
Rev 1y % (Qtr) 1.77
Total Debt (Qtr) 7.48 Bn
Debt/Equity (Qtr) 0.59

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 3.53B provides robust 0.47x coverage of total debt 7.48B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 29.32B provides 3.92x coverage of total debt 7.48B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 3.53B provides exceptional 16.10x coverage of interest expenses 219M, showing strong debt service capability.
  • Operating cash flow of 3.53B provides exceptional 43.53x coverage of minority interest expenses 81M, showing strong core operations.
  • Strong operating cash flow of 3.53B provides 1.62x coverage of SG&A expenses 2.17B, showing efficient operational cost management.

Bear case

  • Operating cash flow of 3.53B barely covers its investment activities of (1.93B), with a coverage ratio of -1.83, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.53B provides thin coverage of dividend payments of (542M) with a -6.51 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 2.04B represents just -4.70x of debt issuance (433M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Cash position of 1.33B provides weak coverage of payables of 7.26B, which is 0.18x, indicating potential working capital stress and supplier relationship risks.
  • Retained earnings of 9.97B provide limited buffer against comprehensive income items of (880M), which is -11.34x, indicating elevated exposure to market risks.

Subsegments Breakdown of Revenue (2024)

Customer Breakdown of Revenue (2024)

Peer comparison

Companies in the Auto Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ORLY O Reilly Automotive Inc 80.07 Bn 32.23 4.59 8.40 Bn
2 AZO Autozone Inc 57.24 Bn 23.23 2.97 12.05 Bn
3 APTV Aptiv PLC 19.67 Bn 66.67 0.98 8.03 Bn
4 GPC Genuine Parts Co 17.83 Bn 22.05 0.74 6.40 Bn
5 MGA Magna International Inc 15.86 Bn 15.36 0.38 7.48 Bn
6 ALV Autoliv Inc 9.72 Bn 12.92 0.92 2.19 Bn
7 MBLY Mobileye Global Inc. 9.47 Bn -28.17 4.88 0.00 Bn
8 BWA Borgwarner Inc 8.87 Bn 66.21 0.63 3.90 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.68 1.16
EV to Cash from Ops. EV/CFO 6.37 9.30
EV to Debt EV to Debt 3.00 34.64
EV to EBIT EV/EBIT 13.10 4.45
EV to EBITDA EV/EBITDA 13.59 7.40
EV to Free Cash Flow [EV/FCF] EV/FCF 11.02 17.25
EV to Market Cap EV to Market Cap 1.41 1.58
EV to Revenue EV/Rev 0.54 3.42
Price to Book Value [P/B] P/B 1.26 -0.33
Price to Earnings [P/E] P/E 15.36 11.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.91 1.64
Dividend Payout Ratio % Div Payout % (Qtr) 52.70 12.18
Dividend per Basic Share Div per Share (Qtr) 1.93 0.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 26.71 13.70
Interest Coverage Int. cover (Qtr) 7.82 -110.44
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 36.08 -13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 25.07 27.17
Dividend Growth (1y) % Div 1y % (Qtr) 2.39 1.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -4.60 5.41
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 -8.06
EBIT Growth (1y) % EBIT 1y % (Qtr) 7.06 -22.36
EBT Growth (1y) % EBT 1y % (Qtr) 7.64 -123.98
EPS Growth (1y) % EPS 1y % (Qtr) -2.40 -110.42
FCF Growth (1y) % FCF 1y % (Qtr) 109.68 24.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.92 16.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.27 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.11 -0.25
Cash Ratio Cash Ratio (Qtr) 0.11 0.69
Current Ratio Curr Ratio (Qtr) 1.18 2.88
Debt to Equity Ratio Debt/Equity (Qtr) 0.59 0.22
Interest Cover Ratio Int Coverage (Qtr) 7.82 -110.44
Times Interest Earned Times Interest Earned (Qtr) 7.82 -110.44
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 -952.44
EBIT Margin % EBIT Margin % (Qtr) 4.10 -997.37
EBT Margin % EBT Margin % (Qtr) 3.58 -987.56
Gross Margin % Gross Margin % (Qtr) 13.90 -122.43
Net Profit Margin % Net Margin % (Qtr) 2.50 -979.78