Dana (DAN) vs. Magna International (MGA) Critical Review
Dana (NYSE: DAN) and Magna International (NYSE:MGA) are both mid-cap auto/tires/trucks companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.
Risk and Volatility
Dana has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Magna International has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.
This table compares Dana and Magna International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
98.6% of Dana shares are held by institutional investors. Comparatively, 59.5% of Magna International shares are held by institutional investors. 1.6% of Dana shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current ratings and price targets for Dana and Magna International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Dana presently has a consensus target price of $23.50, suggesting a potential downside of 17.22%. Magna International has a consensus target price of $53.88, suggesting a potential downside of 0.97%. Given Magna International’s stronger consensus rating and higher possible upside, analysts plainly believe Magna International is more favorable than Dana.
Earnings & Valuation
This table compares Dana and Magna International’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Dana||$6.37 billion||0.64||$704.00 million||$4.71||6.03|
|Magna International||$37.16 billion||0.54||$4.01 billion||$5.54||9.82|
Magna International has higher revenue and earnings than Dana. Dana is trading at a lower price-to-earnings ratio than Magna International, indicating that it is currently the more affordable of the two stocks.
Dana pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Magna International pays an annual dividend of $1.10 per share and has a dividend yield of 2.0%. Dana pays out 5.1% 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. Dana has raised its dividend for 5 consecutive years and Magna International has raised its dividend for 2 consecutive years.
Dana Incorporated, formerly Dana Holding Corporation, is a global provider of technology driveline, sealing and thermal-management products. The Company operates in four segments: Light Vehicle Driveline Technologies (Light Vehicle), Commercial Vehicle Driveline Technologies (Commercial Vehicle), Off-Highway Driveline Technologies (Off-Highway) and Power Technologies. It has operations in North America, South America, Europe and Asia pacific. Its Light Vehicle segment offers products, such as front axles, rear axles, driveshafts/propshafts, differentials, torque couplings and modular assemblies. Its Commercial Vehicle segment offers products, such as steer axles, drive axles, drive shafts and tire inflation systems. Its Off-Highway segment offers products, such as front axles, rear axles, drive shafts, transmissions, torque converters, tire inflation systems and electronic controls. Its Power Technologies segment offers products, including gaskets and cover modules.
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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