Quit scanning the market for a reasonably priced stock! Your search ends as Magna International (NYSE:MGA) offers growth, value and yield. Plus, it’s a company that most U.S.-based investors don’t know about. Consequently, you have access to an underappreciated opportunity right now with Magna International stock.
Just to recap, Magna International is a Canada-based provider of automotive technology. As we’ll discover, the company is teaming up with an iconic American automaker. This adds to the already impressive value proposition you’ll find with Magna International.
Magna International Collaborates With a Famous Automaker
So, let’s dive right into the details. Magna International is collaborating with General Motors (NYSE:GM) and technology services and consulting firm Wipro (NYSE:WIT) to develop a business-to-business sales platform for the buying and selling of automotive software.
This platform, known as SDVerse, is described as a “matchmaking platform for buyers and sellers of embedded automotive software.”
SDVerse is intended to reduce the time, costs and complexities involved in the currently available automotive software procurement processes.
As I see it, there’s a vast moneymaking opportunity here for all parties. According to Harmeet Chauhan, Global Head Wipro Engineering Edge, Wipro Limited, “The market for automotive software is expected to nearly double this decade.”
In other words, Magna International’s team-up with General Motors and Wipro should provide long-term benefits for the three companies and their stakeholders.
Magna International’s Amazing Earnings Growth
Certainly, the SDVerse partnership should help Magna International grow its business over the coming years. However, the company is already growing its bottom line quite rapidly.
Impressively, Magna International’s fourth-quarter 2023 adjusted EPS increased 41.5% year over year to $1.33 (versus 94 cents per share in the year-earlier quarter). Furthermore, the company’s quarterly sales increased 9% YOY to $10.5 billion.
Thus, Magna International’s growth is indisputable. However, despite its notable growth pace, the company isn’t overvalued at all. On a trailing 12-month basis, Magna International has a GAAP price-to-earnings ratio of 11.42x. This compares favorably to the sector median P/E ratio of 17.13x.
Passive-income investors should conduct their due diligence on Magna International. That’s because the company offers a forward annual dividend yield of 3.58%, which easily beats the cyclical sector average dividend yield of around 1%.
Magna International Stock: Who Says You Can’t Have It All?
Sales and earnings growth? Check. A good value? Check. Generous dividend distributions? Check. Unless I’m missing something, it sure sounds like Magna International offers a complete package for investors.
Then, there’s the icing on the cake as Magna International teams up with General Motors and Wipro. If all of this isn’t enough for you, then maybe you’re just asking for too much. So, stop waiting and hesitating, and go get yourself some Magna International stock.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
