Magna International (NYSE: MGA) and Harman International Industries (NYSE:HAR) are both mid-cap cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.
This is a breakdown of recent recommendations for Magna International and Harman International Industries, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Harman International Industries||0||1||0||0||2.00|
Magna International currently has a consensus price target of $58.17, indicating a potential downside of 0.52%. Given Magna International’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Magna International is more favorable than Harman International Industries.
Magna International pays an annual dividend of $1.10 per share and has a dividend yield of 1.9%. Harman International Industries pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Magna International pays out 19.6% of its earnings in the form of a dividend. Harman International Industries pays out 27.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Magna International has raised its dividend for 7 consecutive years and Harman International Industries has raised its dividend for 6 consecutive years. Magna International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Magna International and Harman International Industries’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Magna International||$36.45 billion||0.58||$2.03 billion||$5.61||10.42|
|Harman International Industries||N/A||N/A||N/A||$5.06||22.04|
Magna International has higher revenue and earnings than Harman International Industries. Magna International is trading at a lower price-to-earnings ratio than Harman International Industries, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Magna International has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500. Comparatively, Harman International Industries has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.
Insider & Institutional Ownership
59.7% of Magna International shares are held by institutional investors. Comparatively, 85.8% of Harman International Industries shares are held by institutional investors. 0.9% of Harman International Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Magna International and Harman International Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Harman International Industries||5.12%||15.69%||6.40%|
Magna International beats Harman International Industries on 12 of the 16 factors compared between the two stocks.
Magna International Company Profile
Magna International Inc. (Magna) is a global automotive supplier. The Company’s segments are North America, Europe, Asia, Rest of World, and Corporate and Other. The Company’s product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure, and roof systems and modules, as well as vehicle engineering and contract manufacturing. The Company has over 320 manufacturing operations and approximately 100 product development, engineering and sales centers in over 30 countries. It provides a range of body, chassis and engineering solutions to its original equipment manufacturer (OEM) customers. It has capabilities in powertrain design, development, testing and manufacturing. It offers bumper fascia systems, exterior trim and modular systems. It offers exterior and interior mirror systems. It offers sealing, trim, engineered glass and module systems. It offers softtops, retractable hardtops, modular tops and hardtops.
Harman International Industries Company Profile
Harman International Industries, Incorporated is engaged in the designing and engineering of connected products and solutions for automakers, consumers and enterprises, including connected car systems, audio and visual products, enterprise automation solutions and connected services. The Company’s segments include Connected Car, Lifestyle Audio, Professional Solutions, Connected Services and Other. The Connected Car segment designs, manufactures and markets connected car systems for vehicle applications. The Lifestyle Audio segment designs, manufactures and markets car audio systems. The Professional Solutions segment designs, manufactures and markets a range of audio, lighting, video and control, and automation solutions for entertainment and enterprise applications The Connected Services segment includes the operations of Symphony Teleca Corporation, Red Bend Ltd. and its automotive services businesses. Its brands include AKG, AMX, Crown, Infinity, JBL, Revel, Soundcraft and Studer.
Receive News & Ratings for Magna International Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Magna International and related companies with MarketBeat.com's FREE daily email newsletter.