Analyzing Magna International (NYSE:MGA) & Wabash National (NYSE:WNC)

Magna International (NYSE:MGA) and Wabash National (NYSE:WNC) are both auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Dividends

Magna International pays an annual dividend of $1.98 per share and has a dividend yield of 2.9%. Wabash National pays an annual dividend of $0.32 per share and has a dividend yield of 2.4%. Magna International pays out 82.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Wabash National pays out -20.0% of its earnings in the form of a dividend. Magna International 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 Wabash National”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magna International	$42.01 billion	0.43	$829.00 million	$2.39	28.13
Wabash National	$1.54 billion	0.35	$211.45 million	($1.60)	-8.25

Magna International has higher revenue and earnings than Wabash National. Wabash National is trading at a lower price-to-earnings ratio than Magna International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Magna International and Wabash National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magna International	1.60%	14.01%	5.53%
Wabash National	-4.41%	-30.16%	-8.79%

Risk and Volatility

Magna International has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, Wabash National has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Magna International and Wabash National, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magna International	1	10	8	1	2.45
Wabash National	1	1	2	0	2.25

Magna International currently has a consensus target price of $65.73, indicating a potential downside of 2.21%. Wabash National has a consensus target price of $18.00, indicating a potential upside of 36.42%. Given Wabash National’s higher probable upside, analysts clearly believe Wabash National is more favorable than Magna International.

Insider & Institutional Ownership

67.5% of Magna International shares are owned by institutional investors. Comparatively, 97.0% of Wabash National shares are owned by institutional investors. 0.5% of Magna International shares are owned by insiders. Comparatively, 2.8% of Wabash National shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Magna International beats Wabash National on 14 of the 18 factors compared between the two stocks.

About Magna International

Magna International Inc. designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks worldwide. It operates through four segments: Body Exteriors & Structures, Power & Vision, Seating Systems, and Complete Vehicles. The Body Exteriors & Structures segment provides body and chassis system, battery enclosures, and engineering and testing; and exteriors, including fascia and trims, front end modules, integration panels, liftgate modules, active aerodynamics, engineered glass, running boards, truck bed access products, breakthrough lightings, side doors, and greenhouse products. The Power & Vision segment offers electric drive systems and components, such as emotors, inverters, onboard chargers, gearboxes, and e-clutch; dedicated hybrid drives, dual and hybrid dual clutch, and manual transmissions; AWD/4WD products and rear drive modules; transmission, driveline components, and ICE; far camera module, remote camera heads, interior sensing camera, radars, thermal sensing, and domain controllers; interior and exterior mirrors, camera monitoring system driver/occupant monitoring systems, and smart actuators; forward and rear lighting, and lit grilles/panels/displays; latching system, door modules, charge port doors, power system, hinges, and door handles; and modular and textile folding roofs, and hard and soft tops. The Seating Systems segment provides seat structures, mechanism and hardware solutions, and foam and trim products. The Complete Vehicles segment offers vehicle engineering and manufacturing services. Magna International Inc. was founded in 1957 and is headquartered in Aurora, Canada.

About Wabash National

Wabash National Corporation provides connected solutions for the transportation, logistics, and distribution industries primarily in the United States. The company operates through two segments, Transportation Solutions and Parts & Services. The Transportation Solutions segment designs and manufactures transportation-related equipment and products dry and refrigerated van trailers, platform trailers, tank trailers, and truck-mounted tanks; truck bodies for dry-freight transportation; cargo and cargo XL bodies for commercial applications; refrigerated truck bodies; platform truck bodies; and used trailers, as well as laminated hardwood oak flooring products. The Parts & Services segment provides aftermarket parts and services; steel flatbed bodies, truck body mounting, shelving for package delivery, partitions, roof racks, hitches, liftgates, thermal solutions, and others; truck body repair parts; and door repair and replacement, collision repair, and basic maintenance services. It also develops and scales a digital marketplace for the transportation and logistics distribution industry; operates a parts and services distribution platform; and stainless steel storage tanks and silos, mixers, and processors for the dairy, food and beverage, pharmaceutical, chemical, craft brewing, and biotech markets; trailers as a service; and composite products, including truck bodies, overhead doors, and other industrial application products, as well as used trailers. The company offers its products under the Wabash, DuraPlate, DuraPlateHD, DuraPlate AeroSkirt, and AeroSkirt CX brands, as well as EcoNex brand. It serves its products to truckload common carriers, leasing companies, private fleet carriers, less-than-truckload common carriers, and package carriers. Wabash National Corporation was founded in 1985 and is headquartered in Lafayette, Indiana.