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Magna International For The Long Run

Ryan Elblein profile picture
Ryan Elblein
8 Followers

The other day while watching Jim Cramer on Mad Money I heard a lot of talk about the auto industry coming back and one company Cramer talked about was Magna International (NYSE:MGA). This sparked my interest so I decided to do some research and see just how good MGA really is.

Ticker MGA
P/E Ratio 11.16
PEG 1.21
Cash / Share 5.63
Dividend (Yield) 1.00 (2.38%)
Price / Book 1.22
Earnings Growth (5 year projected) 9.25%
Debt / Equity 0.02

P/E Ratio: In many cases a P/E ratio could be a good indicator of a company being over or undervalued, however, this is not one of those times. MGA has a P/E ratio of 11.16, which is very close to the industry average of 10.2 meaning MGA is about average.

PEG: Similar to P/E a lower PEG is generally desired. MGA has a PEG of 1.21, which is close to the industry average of around 1.14. Just as the P/E was around industry average, the PEG for MGA is also around the industry average.

Cash / Share: Here's where the good stuff starts to come into play. A cash per share ratio is essentially how much cash a company has sitting around per share of stock. In this case MGA has a cash / share of 5.63, which means that Magna has $5.63 of cash for every 1 share of stock. I searched around the news and it appears that MGA is going to expand some of its plants, such as a plant in Tennessee, as well as try to acquire several smaller auto parts companies in several countries including China. The cash per share ratio of $5.63 shows MGA has the cash to expand its operations without taking on a lot of debt.

Dividend: The

This article was written by

Ryan Elblein profile picture
8 Followers
Controller/CPA for a real estate developer as well as a part-time Mortgage Loan Originator. I have a background in public accounting, specifically taxation. I am currently interested in learning and writing about the real estate industry.

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