Is it a good company at a reasonable price? It is interesting that the analysts’ recommendations include all rankings from Strong Buy to Sell. This does not happen often. Analysts seem to be worried about tariffs affecting this company. But they are not going to go on forever. If you think this is a good company and you want it for the long term, you should buy well it is cheap. My stock price testing is saying that the stock price is relatively cheap.
I do not own this stock of Magna International Inc (TSX-MG, NYSE-MGA). I held this company between September 2002 and September 2006 and earned 5% return per year including dividends. When I bought this stock in 2002, I felt I was paying a good price for it. There were some rumors that it might be bought out in 2006, so I sold.
When I was updating my spreadsheet, I noticed Earnings per Share (EPS) and Adjusted Earnings per Share (AEPS) seems to have hit a peak in 2019. Revenue has gone up since then some 20%, but EPS and AEPS has fallen some 37% and 11%. In 2025 Revenue is expected to go up almost 1%, but AEPS is expected to fall around 1.7%. However, analysts expect EPS to go up some 41%.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. In column 5, I am showing what growth has been over the past 12 months and what is expected to the end of this year.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth US$ | 8.64% | 1.67% | -2.44% | <-12 mths |
| 5 | AEPS Growth | -10.58% | -2.21% | -3.14% | <-12 mths |
| 5 | Net Income Growth | -37.90% | -9.09% | -2.19% | <-12 mths |
| 5 | Cash Flow Growth | -8.23% | -1.70% | -2.97% | <-12 mths |
| 5 | Dividend Growth | 30.14% | 5.41% | 1.95% | <-12 mths |
| 5 | Stock Price Growth | -23.80% | -5.29% | 15.48% | <-12 mths |
| 10 | Revenue Growth | 16.91% | 1.57% | -2.93% | <-this year |
| 10 | AEPS Growth | 21.85% | 2.00% | -1.66% | <-this year |
| 10 | Net Income Growth | -41.76% | -5.26% | 26.37% | <-this year |
| 10 | Cash Flow Growth | 30.16% | 2.67% | -24.17% | <-this year |
| 10 | Dividend Growth | 150.00% | 9.60% | 2.11% | <-this year |
| 10 | Stock Price Growth | -23.11% | -2.59% | 18.14% | <-this year |
If you had invested in this company in December 2014, for $1,007.20 you would have bought 16 shares at $62.95 per share. In December 2024, after 10 years you would have received $311.38 in dividends. The stock would be worth $961.28. Your total return would have been $1,272.66. This would be a total return of 2.60% per year with 0.47% from capital loss and 3.07% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $62.95 | $1,007.20 | 16 | 10 | $311.38 | $961.28 | $1,272.66 |
Current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% range) at 4.02%. The 5, 10 and historical median dividend yields are moderate at 3.19%, 2.60% and 2.05%. The dividend growth is low (below 8% per year) at 5.4% per year. The last dividend increase was in 2025 and it was for 2.1%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is high at 54% with 5 year coverage at 51%, but the DPR on AEPS is a better measure. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 35% with 5 year coverage at 37%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 18% with 5 year coverage at 18%. The DPR for 2024 for Free Cash Flow (FCF) is high at 69% with 5 year coverage good at 49%. FCF varies in 2024 from 1,995M to $780M. I am using $780M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 53.98% | 51.21% |
| AEPS | 35.12% | 37.31% |
| CFPS | 18.20% | 18.18% |
| FCF | 68.91% | 48.66% |
Debt Ratios are fine, but Liquidity Ratio should be improved. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.35 and currently at 0.36. The Liquidity Ratio for 2024 is low at 1.08 and 1.18 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.34 and currently at 1.37. I like to see the Liquidity Ratio at 1.50 or above. The Debt Ratio for 2024 is good at 1.63 and 1.65 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.69 and 1.65 and currently at 2.61 and 1.59.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.35 | 0.36 |
| Intang/GW | 0.29 | 0.26 |
| Liquidity | 1.08 | 1.18 |
| Liq. + CF | 1.34 | 1.37 |
| Debt Ratio | 1.63 | 1.65 |
| Leverage | 2.69 | 2.61 |
| D/E Ratio | 1.65 | 1.59 |
The Total Return per year is shown below for years of 5 to 36 to the end of 2024 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 7.59% | 0.21% | -3.34% | 3.55% |
| 2014 | 10 | 12.50% | 2.60% | -0.47% | 2.69% |
| 2009 | 15 | 29.28% | 15.08% | 10.57% | 4.25% |
| 2004 | 20 | 9.50% | 7.09% | 4.56% | 2.11% |
| 1999 | 25 | 7.99% | 8.24% | 5.50% | 1.96% |
| 1994 | 30 | 10.62% | 7.72% | 5.28% | 1.98% |
| 1989 | 35 | 9.34% | 13.06% | 9.18% | 3.00% |
| 1988 | 36 | 9.07% | 12.31% | 8.71% | 3.60% |
The Total Return per year is shown below for years of 5 to 36 to the end of 2024 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 5.41% | -1.69% | -5.29% | 3.60% |
| 2014 | 10 | 9.60% | 0.41% | -2.59% | 3.01% |
| 2009 | 15 | 28.34% | 12.81% | 8.30% | 4.51% |
| 2004 | 20 | 8.52% | 6.30% | 3.59% | 2.71% |
| 1999 | 25 | 8.00% | 8.55% | 5.48% | 3.06% |
| 1994 | 30 | 10.52% | 7.22% | 4.71% | 2.51% |
| 1989 | 35 | 8.73% | 12.38% | 8.57% | 3.81% |
| 1988 | 36 | 8.55% | 11.80% | 8.19% | 3.61% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.72, 19.60 and 19.76. The corresponding 10 year ratios are 9.23, 11.24 and 13.25. The corresponding historical ratios are 8.48, 12.38 and 13.39. The current ratio is 9.71 based on a stock price of $68.03 and EPS estimate for 2025 of $7.00 ($4.97 US$). The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.68, 12.37 and 18.61. The corresponding 10 year ratios are 7.06, 9.74 and 11.63. The corresponding historical ratios are 7.46, 10.50 and 12.47. The current ratio is 9.07 based on a stock price of $48.26 and AEPS estimate for 2025 of $5.32. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$ and you will get a similar result in CDN$.
I get a Graham Price of $102.95. The 10-year low, median, and high median Price/Graham Price Ratios are 0.64, 0.80 and 0.93. The current ratio is 0.66 based on a stock price of $68.03. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 1.54. The current ratio is 1.08 based on a stock price of $48.26, Book Value of $12,599M and Book Value per Share of $44.54. The current ratio is 30% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
I also have Book Value per Share estimate for 2025 of $45.80. This implies a Book Value of $12,956M with a ratio of 1.05 based on a stock price of $48.26. In this case, the ratio is 32% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10-year median Price/Cash Flow per Share Ratio of 5.05. The current ratio is 4.95 based on Cash Flow per Share estimate for 2025 of $9.74, Cash Flow $2,756M and a stock price of $48.26. The current ratio is 2% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$ and you will get a similar result in CDN$.
I get an historical median dividend yield of 2.04%. The current dividend yield is 4.02% based on dividends of $1.94 and a stock price of $48.26. The current ratio is 96% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
I get a 10 year median dividend yield of 2.60%. The current dividend yield is 4.02% based on dividends of $1.94 and a stock price of $48.26. The current ratio is 55% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
The 10-year median Price/Sales (Revenue) Ratio is 0.45. The current P/S Ratio is 0.33 based on Revenue estimate for 2025 $41,581M, Revenue per Shae of $146.99 and a stock price of $48.26. The current ratio is 26% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
Results of stock price testing is that the stock price is probably cheap. The dividend yield tests say that the stock price is cheap and it is confirmed by the P/S Ratio test. The rest of the testing is either saying that the stock price is cheap or that it is reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3), Hold (12), Underperform (1) and Sell (1). The consensus is a Hold. The 12 month stock price is $69.61 ($49.37 US$) with a high of $88.55 ($62.80 U$) and low of $60.18 ($42.68 US$). The consensus stock price of $69.61 implies a total return of 6.35% with 2.33% from capital gains and 4.02% from dividends based on a current stock price of $68.03.
There are various opinions on this stock on Stock Chase for 2025. A lot of analysts feel that it will be hit hard by tariffs. Jitendra Parashar on Motley Fool think this stock is a good buy for long-term investors. Kay Ng on Motley Fool says that this popular stock is fairly valued. The company put out a Press Release via Globe Newswire about their fourth quarter of 2024. The company put out a press release via Globe Newswire about their third quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and says that by its fair value, it is undervalued. Simply Wall Street has no warnings out on this stock.
Magna International product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contract vehicle assembly. In 2024, 48% of Magna's USD 42.8 billion of revenue came from North America, while Europe accounted for approximately 37% and Asia the remainder. Its web site is here Magna International Inc .
The last stock I wrote about was about was Methanex Corp (TSX-MX, NASDAQ-MEOH) ... learn more. The next stock I will write about will be Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more on Wednesday, November 3, 2025 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks November 2025 … learn more on Tuesday, December 2, 2025 around 5 pm.
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