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

Dividends

Magna International pays an annual dividend of $1.10 per share and has a dividend yield of 2.0%. Visteon Corporation does not pay a dividend. Magna International pays out 19.9% of its earnings in the form of a dividend. Visteon Corporation has increased its dividend for 5 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Magna International 5.73% 20.01% 9.12%
Visteon Corporation 4.35% 27.56% 8.67%

Valuation and Earnings

This table compares Magna International and Visteon Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Magna International $37.16 billion 0.55 $4.01 billion $5.54 9.89
Visteon Corporation $3.17 billion 1.22 $335.00 million $4.19 29.72

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

Volatility and Risk

Magna International has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, Visteon Corporation has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Magna International and Visteon Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magna International 1 3 7 1 2.67
Visteon Corporation 0 5 7 0 2.58

Magna International currently has a consensus target price of $53.88, suggesting a potential downside of 1.71%. Visteon Corporation has a consensus target price of $113.73, suggesting a potential downside of 8.66%. Given Magna International’s stronger consensus rating and higher possible upside, equities analysts plainly believe Magna International is more favorable than Visteon Corporation.

Insider and Institutional Ownership

59.5% of Magna International shares are held by institutional investors. 0.2% of Visteon Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Magna International beats Visteon Corporation on 11 of the 17 factors compared between the two stocks.

Magna International Company Profile

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.

Visteon Corporation Company Profile

Visteon Corporation is a global automotive supplier that designs, engineers and manufactures electronics products for original equipment vehicle manufacturer (OEM), including Ford, Mazda, Nissan/Renault, General Motors, Honda BMW and Daimler. The Company operates through Electronics segment. The Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment, audio systems, telematics solutions and head up displays. It designs and manufacturers vehicle cockpit electronics components, modules and systems. It offers a range of information displays incorporating a sleek profile, craftsmanship and touch sensors, designed to deliver high performance for the automotive market. It offers a range of audio products, including audio head units, and analog and digital radios, which deliver consumer device connectivity. It offers an automotive-grade, integrated domain controller approach, called Smartcore.

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