American Axle & Manufact. (NYSE:AXL) and Magna International (NYSE:MGA) are both auto/tires/trucks companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current ratings and target prices for American Axle & Manufact. and Magna International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Axle & Manufact. 2 2 4 0 2.25
Magna International 2 2 13 0 2.65

American Axle & Manufact. presently has a consensus target price of $19.14, indicating a potential upside of 8.52%. Magna International has a consensus target price of $65.40, indicating a potential upside of 22.01%. Given Magna International’s stronger consensus rating and higher possible upside, analysts plainly believe Magna International is more favorable than American Axle & Manufact..

Volatility and Risk

American Axle & Manufact. has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Magna International has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500.

Insider & Institutional Ownership

98.3% of American Axle & Manufact. shares are owned by institutional investors. Comparatively, 59.2% of Magna International shares are owned by institutional investors. 1.0% of American Axle & Manufact. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Magna International pays an annual dividend of $1.32 per share and has a dividend yield of 2.5%. American Axle & Manufact. does not pay a dividend. Magna International pays out 22.1% of its earnings in the form of a dividend. Magna International has increased its dividend for 6 consecutive years.

Valuation & Earnings

This table compares American Axle & Manufact. and Magna International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Axle & Manufact. $6.27 billion 0.31 $337.10 million $3.75 4.70
Magna International $38.95 billion 0.47 $2.21 billion $5.96 8.99

Magna International has higher revenue and earnings than American Axle & Manufact.. American Axle & Manufact. 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 American Axle & Manufact. and Magna International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Axle & Manufact. 6.00% 28.36% 5.66%
Magna International 5.72% 19.72% 8.94%

Summary

Magna International beats American Axle & Manufact. on 11 of the 17 factors compared between the two stocks.

American Axle & Manufact. Company Profile

American Axle & Manufacturing Holdings, Inc., together with its subsidiaries, designs, engineers, validates, and manufactures driveline, metal forming, powertrain, and casting products. The company's Driveline segment offers axles, driveshafts, power transfer units, rear drive modules, transfer cases, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. Its Metal Forming segment provides axle and transmission shafts, ring and pinion gears, differential gears, transmission gears and shafts, and suspension components for original equipment manufacturers and automotive suppliers. The company's Powertrain segment offers transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for original equipment manufacturers and automotive suppliers. Its Casting segment produces thin wall castings and high strength ductile iron castings, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the light vehicle, commercial, and industrial markets. The company has operations in the United States, Canada, Mexico, South America, China, Europe, other Asian countries, and internationally. American Axle & Manufacturing Holdings, Inc. was founded in 1994 and is headquartered in Detroit, Michigan.

Magna International Company Profile

Magna International Inc. designs, develops, and manufactures automotive systems, assemblies, modules, and components in North America, Europe, Asia, and South America. The company offers body systems, including exterior sheetmetal and closure systems, body structure systems, and energy management solutions; chassis systems, such as frames and chassis subframes, suspension links and arms, and chassis modules; and engineering services comprising support, program management, virtual tool, prototype build and validation, testing, and research and development services. It also provides fascia and exterior trims, liftgate and exterior modules, front end modules, ACTERO active aerodynamics, and lightweight composites; and roof systems that include softtops, retractable hardtops, modular tops, and hardtops. In addition, the company offers latching system, hinge and wire forming, power closure, electronic, door module, window system, engineered glass, sealing, trim and roof rack, testing center, and running board closures; and driveline systems, fluid pressure and controls, and metal-forming solutions. Further, it provides driver assistance systems and electronic components; and interior and exterior mirrors, actuators, electronic vision systems, door handle and overhead console technologies, and front and signal lightings. Additionally, the company offers seating systems, mechanism and seat structure solutions, foam and trim solutions, and design and development solutions; and engineering services, vehicle contract manufacturing services, and fuel systems. The company serves original equipment manufacturer, tier 1, medium and heavy truck, and non-automotive customers. Magna International Inc. was founded in 1957 and is headquartered in Aurora, Canada.

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