When a leading stock in the industrial sector drops, it can feel risky to jump in. But sometimes, that dip creates a rare opportunity to grab a top performer on sale. That’s what investors might be looking at right now with Magna International (TSX:MG). This Canadian auto parts giant is down about 15% year to date, even though its core business is holding up well. For investors looking for a long-term winner in the industrial space, this could be the perfect moment to consider buying the dip.
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About Magna
Magna makes everything from car seats and mirrors to complete vehicle systems for brands like BMW, Ford, and General Motors. It’s one of the largest suppliers in the world, and it has operations across North America, Europe, and Asia. So when global vehicle production slows, Magna often feels it. That’s what happened earlier this year. Production declined across North America and Europe, which pulled down Magna’s revenue. But despite that, Magna still delivered a solid earnings report.
In the first quarter of 2025, Magna reported revenue of US$10.1 billion, down 8% from the same period last year. That dip was largely expected due to lower vehicle builds and some production disruptions. Yet net income came in at US$146 million, a sharp jump from just US$9 million the year before. Earnings per share (EPS) rose to US$0.52 from US$0.03. Adjusted earnings before interest and taxes (EBIT) came in at US$354 million, with a margin of 3.5%. These numbers show that Magna managed its costs well and is staying profitable even during a slowdown.
Magna also reported US$547 million in operating cash flow for the quarter. It returned US$187 million to shareholders through dividends and share buybacks. That’s an important point. Even with revenue under pressure, Magna continued to deliver cash to investors. Its current annual dividend is at $2.69, which works out to a yield of about 5.2%. That’s a solid payout from a global industrial company with a long history of dividends, with a $7,000 investment giving out $363.15 in annual income at writing!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (annual) | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| MG | $51.56 | 135 | $2.69 | $363.15 | Quarterly | $6,960.60 |
More to come
Looking ahead, Magna raised its full-year earnings guidance. The company expects adjusted EPS to rise through the rest of 2025 as global production stabilizes and margins recover. Management said it is focused on improving productivity and cost control, especially in its European operations. That includes limiting new spending and continuing restructuring efforts in underperforming areas. If vehicle production begins to rebound in the second half of the year, Magna is in a strong position to benefit.
The market hasn’t fully appreciated that progress yet. Magna stock has underperformed the broader TSX this year. That’s created a rare chance to buy the Canadian stock at a discount. It now trades at a price-to-earnings ratio (P/E) at 9.3, which is low for a company with global scale, cash flow, and a solid dividend. The Canadian stock is also trading well below its 52-week high, making it attractive for value-focused investors.
Of course, there are risks. The Canadian stock is exposed to global trade uncertainty, particularly with ongoing tariff tensions. It also faces challenges as automakers shift more toward electric vehicles. Though Magna has been investing in electric vehicle (EV) systems, software, and advanced driver assistance. That positions it well for the next generation of automotive growth.
Bottom line
Magna has a long history of adapting to change. It’s not flashy, but it’s consistent. It generates billions in revenue, holds a strong global footprint, and pays investors along the way. Buying a Canadian stock like this when it’s temporarily down, not because of a broken business, but because of market nerves, can pay off over time.
So if you’re looking for an industrial stock that offers income, international exposure, and a potential rebound, Magna could be one to watch. It’s not immune to economic ups and downs, but it has a strong foundation. And with the stock down almost 15% this year, this might be the dip worth buying.
