Our analysis is based on comparing Magna International, Inc. with the following peers – Dana Incorporated, Visteon Corporation, Autoliv Inc., American Axle & Manufacturing Holdings, Inc., BorgWarner Inc., Lear Corporation, Ford Motor Company, STRATTEC SECURITY CORPORATION, Tower International, Inc. and MARTINREA International Inc. (DAN-US, VC-US, ALV-US, AXL-US, BWA-US, LEA-US, F-US, STRT-US, TOWR-US and MRE-CA).
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), MGA-US paid a high quality dividend, which represents a yield of 2.31% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 2.62x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to March 31, 2017), MGA-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 8.94x), investing cash flow (coverage of -5.44x), issuance cash flow (coverage of -1.47x) and twelve-month prior cash (coverage of 1.59x), for a total dividend coverage of 3.62x.
MGA-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -1.78x). Thus, the total coverage including share buybacks is 5.40x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||2.17||1.57||1.42||2.18||2.32||2.9|
|Dividend Payout (%)||18.07||19.18||17.47||18.7||19.3||18.89|
A complete list of metrics and analysis is available on the company page.
Magna International, Inc. designs, develops and manufactures automotive systems, assemblies, modules and components. It assembles complete vehicle, primarily for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Asia, South America and Africa. The company was founded by Frank Stronach in 1957 and is headquartered in Aurora, Canada.
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