Magna International (TSX:MG) is among the top stocks in the Canadian stock market and has recently been making headlines for various reasons. Hence, you might be wondering whether to buy, sell, or hold this stock. Well, we have got you covered.
Continue reading to understand MG’s current position and future prospects.
About the company
Magna International is a Canada-based automotive parts manufacturing company that offers modular systems and numerous parts solutions along with vehicle assembly. It supplies its products and services mainly to the original equipment manufacturers (OEMs) of mini trucks and cars. Its products and services revolve around engineering, designing, closure systems, chassis & body, electronic systems, seating systems, and full vehicle manufacturing contracts.
Though it has its headquarters in Canada, it operates manufacturing facilities, product development centers, and showrooms in the countries of South America, North America, Asia, and Europe.
Magna’s outlook is worth paying attention to
Magna International has faced several challenges and hindrances over the last few years, even going for an operational pause during the COVID-19 pandemic. But despite all these challenges, it managed to turn around during the supply chain issue when the entire world got rattled.
In 2023, Magna International’s business witnessed a positive outlook when it expanded itself in the autonomous vehicle and electric vehicle market. In its latest quarterly earnings report, its year-on-year sales grew at a rate of 15% while its adjusted diluted earnings per share surged one-third compared to the same quarter of last year.
Currently, Magna International’s shares are priced at a forward price-to-earnings ratio of 8.3 times for this fiscal year, which is lower than the industry average of 11.4 times in the automotive OEM sector. Moreover, its PEG ratio is 0.5, and the price-to-cash flow ratio is 6.2 times. For value investors, it’s important to consider MG’s low price-to-sales ratio of 0.4 times.
As of the date of writing, this stock is trading at $78.89 per share; it is 37.01% lower than its all-time high and approximately 22.48% up from its 52-week low. It is offering a dividend yield of 3.2% and an enterprise value over earnings before interest, taxes, depreciation, and amortization of just 10, which has a lot more potential to grow in the near future.
Bottom line
By now, you will have some idea of the current standing of the Magna International stock. If you are already holding the stock, it is suggested to hold it, and if you are planning to buy the stock, you can go for it, but selling at the moment might not be a wise idea. However, if you are planning to make a significant investment, consider consulting an expert.
