Magna International Inc. (USA) (MGA), General Motors Company (GM), Dana Holding Corporation (DAN): Robust Value in this Automotive Supplier

Management now expects full-year sales of $7 billion, down from $7.1 billion. Still, the company has been doing a fairly good job in gaining business, scoring contracts with General Motors Company (NYSE:GM) and Ford, among others . Aside from performing better than Dana Holding Corporation (NYSE:DAN), Magna is also valued more attractively at the moment.

Valuations and metrics

Magna is an inexpensive stock at the moment, trading at 12.07 times trailing earnings and 1.87 times book value. This is considerably cheaper than Dana Holding Corporation (NYSE:DAN)’s 16.53 times trailing earnings and 2.84 times book value. Magna has a pretty decent return on equity of 16.68% and an operating margin on par with the industry. Moreover, its balance sheet is in good shape, with $364 million in debt and $1.28 billion in cash.

The bottom line

With the US auto market in good shape, and solid sales figures for the year, things look pretty good for auto makers. However, things also look bright for auto parts companies as increased demand for vehicles will naturally lead to increased auto parts sales. Magna has been doing a great job increasing sales, even outpacing the industry. Additionally, Magna is trading at a discount to the market. As such, it looks like a good investment.

The article Robust Value in this Automotive Supplier originally appeared on and is written by Daniel James.

Daniel James has no position in any stocks mentioned. The Motley Fool recommends General Motors (NYSE:GM).

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