This A-Rated Stock is Trading a Significant Discount to Its Intrinsic Value

In this analyze out loud video, Chuck Carnevale, co-founder of FAST Graphs offers a by-the-numbers review of Magna International Inc. (MGA). This A- rated stock offers a 3.04% dividend yield and trades at a blended P/E ratio of 11.94, and a significant discount to its intrinsic value. Consequently, it offers the combination of above-average dividend yield that has grown considerably since 2010.

Although the company is expected to have a small decrease in operating earnings in fiscal year 2022, future growth is expected to recover strongly. Magna International, Inc. is a mobility technology company which engages in the design and engineering and manufacturing of automotive parts and supplies. The company’s various product lines produce products for exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electrical vehicle systems, tooling and engineering.

Recent earnings weakness leading to price weakness is due to a severe shortage of chips and parts consistent with the entire automotive industry. According to Zacks Investment Research, the company operates under four reportable segments: body exteriors and structures representing 39.3% of total revenues, power and vision representing 30.8%, seating systems representing 13.3%, and complete vehicles representing 16.6%.

The company does about 46% of their business in North America and 43% in Europe. Therefore, Magna International Inc. is one of the largest and most diversified auto parts suppliers in the world. This research candidate is offered as both a current income and long-term total return candidate.

— Chuck Carnevale

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Source: FAST Graphs