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Stoneridge (SRI) vs. Magna International (NYSE:MGA) Head to Head Review

Magna International (NYSE: MGA) and Stoneridge (NYSE:SRI) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitabiliy, earnings, institutional ownership and valuation. Volatility & Risk

Magna International has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Comparatively, Stoneridge has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Profitability This table compares Magna International and Stoneridge’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magna International 6.37% 23.37% 10.38%
Stoneridge 10.12% 22.52% 9.17%

Institutional and Insider Ownership

60.5% of Magna International shares are owned by institutional investors. Comparatively, 87.7% of Stoneridge shares are owned by institutional investors.

5.3% of Stoneridge shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth. Analyst Recommendations

This is a summary of recent ratings for Magna International and Stoneridge, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magna International 1 3 7 1 2.67
Stoneridge 0 1 1 0 2.50

Magna International currently has a consensus target price of £51.75, suggesting a potential upside of 7.81%. Stoneridge has a consensus target price of £19.50, suggesting a potential upside of 14.84%. Given Stoneridge’s higher probable upside, analysts clearly believe Stoneridge is more favorable than Magna International.

Valuation and Earnings This table compares Magna International and Stoneridge’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Magna International £36.92 billion 0.50 £4.00 billion £5.47 8.78
Stoneridge £759.88 million 0.63 £82.90 million £2.70 6.29

Magna International has higher revenue and earnings than Stoneridge. Stoneridge is trading at a lower price-to-earnings ratio than Magna International, indicating that it is currently the more affordable of the two stocks.

Dividends Magna International pays an annual dividend of £1.10 per share and has a dividend yield of 2.3%. Stoneridge does not pay a dividend.

Magna International pays out 20.1% of its earnings in the form of a dividend. Magna International has increased its dividend for 5 consecutive years. Summary

Magna International beats Stoneridge on 11 of the 18 factors compared between the two stocks. Magna International Company Profile Magna International logoMagna International Inc. (Magna) is a global automotive supplier.

The Company’s segments are North America, Europe, Asia, Rest of World, and Corporate and Other. The Company’s product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure, and roof systems and modules, as well as vehicle engineering and contract manufacturing. The Company has over 320 manufacturing operations and approximately 100 product development, engineering and sales centers in over 30 countries.

It provides a range of body, chassis and engineering solutions to its original equipment manufacturer (OEM) customers. It has capabilities in powertrain design, development, testing and manufacturing. It offers bumper fascia systems, exterior trim and modular systems.

It offers exterior and interior mirror systems. It offers sealing, trim, engineered glass and module systems. It offers softtops, retractable hardtops, modular tops and hardtops.

Stoneridge Company Profile Stoneridge logoStoneridge, Inc. is a designer and manufacturer of engineered electrical and electronic components, modules and systems for the automotive, commercial, motorcycle, off-highway and agricultural vehicle markets. The Company operates through three segments: Control Devices, Electronics and PST.

The Company’s Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle and includes product lines, such as sensors, switches, valves, and actuators. The Company’s Electronics segment designs and manufactures electronic instrument clusters, electronic control units and driver information systems. The PST segment is engaged in the design, manufacture and sale of in-vehicle audio and video devices, electronic vehicle security alarms, convenience accessories, vehicle tracking devices and monitoring services primarily for the automotive and motorcycle industry.

It operated in 25 locations in 12 countries, as of December 31, 2016.

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References

  1. ^ MarketBeat.com’s FREE daily email newsletter (www.chaffeybreeze.com)

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