Magna International Inc. Common Stock (MGA)

FairStock Score: 49/100 — MIXED

Key Financials

Strengths

• Generates $1.3 billion in annual free cash flow (7.7% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Attractive 3.2% dividend yield providing steady income returns
• Established organization with 1,56,000 employees providing operational scale

Concerns

• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Anemic revenue growth of 2.1% for a company of this size limits long-term upside
• Altman Z-Score of 1.5 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Magna International Inc. Common Stock is a mid-cap consumer cyclical company valued at $17.1 billion. Revenue stands at $42.0 billion, though the company is currently unprofitable. From a quality standpoint, Magna shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 1.5 warrants caution. On valuation, the stock is reasonably priced at 21.2x earnings, with trades above its Graham Number with a negative 14% margin. Growth dynamics show revenue growing at 2.1% and profit growth of -100.5%. The 3.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 49/100 reflects mixed fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $1.3 billion in annual free cash flow (7.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Without a clear path to profitability, continued cash burn forces either dilutive equity raises or debt accumulation that destroys shareholder value. Sluggish 2% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer