Autoliv (NYSE: ALV) and Magna International (NYSE:MGA) are both mid-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Earnings & Valuation

This table compares Autoliv and Magna International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Autoliv $10.22 billion 0.92 $1.28 billion $6.32 17.06
Magna International $37.16 billion 0.46 $4.01 billion $5.54 8.41

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

Profitability

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

Net Margins Return on Equity Return on Assets
Autoliv 5.44% 13.96% 6.75%
Magna International 5.73% 20.01% 9.12%

Dividends

Autoliv pays an annual dividend of $2.40 per share and has a dividend yield of 2.2%. Magna International pays an annual dividend of $1.10 per share and has a dividend yield of 2.4%. Autoliv pays out 38.0% of its earnings in the form of a dividend. Magna International pays out 19.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Autoliv has raised its dividend for 5 consecutive years and Magna International has raised its dividend for 7 consecutive years. Magna International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

34.8% of Autoliv shares are held by institutional investors. Comparatively, 59.7% of Magna International shares are held by institutional investors. 0.3% of Autoliv shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Autoliv has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Magna International has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Autoliv and Magna International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Autoliv 3 8 6 0 2.18
Magna International 1 4 7 1 2.62

Autoliv presently has a consensus price target of $104.22, suggesting a potential downside of 3.34%. Magna International has a consensus price target of $52.67, suggesting a potential upside of 12.99%. Given Magna International’s stronger consensus rating and higher possible upside, analysts plainly believe Magna International is more favorable than Autoliv.

Summary

Magna International beats Autoliv on 14 of the 18 factors compared between the two stocks.

About Autoliv

Autoliv, Inc. is a supplier of automotive safety systems with a range of product offerings, including passive safety systems and active safety systems. The Company operates through two segments: Passive Safety and Electronics. The Passive safety products include modules and components for passenger and driver-side airbags, side-impact airbag protection systems, seatbelts, steering wheels, inflator technologies, whiplash protection systems and child seats, and components for such systems, as well as passive safety electronic products, such as restraint electronics and crash sensors. The Active safety products include camera-based vision systems, night driving assist, automotive radars, brake controls, positioning systems, electronic control units, and other active safety systems. As of December 31, 2016, including joint venture operations, the Company had approximately 78 production facilities in 25 countries, consisting of both component factories and assembly factories.

About Magna International

Magna 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.

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