Reviewing Magna International (NYSE:MGA) & Stoneridge (NYSE:SRI)

Stoneridge (NYSE:SRI) and Magna International (NYSE:MGA) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stoneridge	1	2	0	0	1.67
Magna International	1	12	5	1	2.32

Stoneridge currently has a consensus price target of $16.00, suggesting a potential upside of 171.65%. Magna International has a consensus price target of $68.87, suggesting a potential upside of 7.38%. Given Stoneridge’s higher possible upside, equities analysts clearly believe Stoneridge is more favorable than Magna International.

Insider and Institutional Ownership

98.1% of Stoneridge shares are owned by institutional investors. Comparatively, 67.5% of Magna International shares are owned by institutional investors. 11.0% of Stoneridge shares are owned by company insiders. Comparatively, 0.5% of Magna International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Stoneridge	-15.64%	-24.91%	-8.33%
Magna International	1.80%	15.04%	5.93%

Volatility and Risk

Stoneridge has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500. Comparatively, Magna International has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Valuation and Earnings

This table compares Stoneridge 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
Stoneridge	$861.26 million	0.20	-$102.83 million	($4.26)	-1.38
Magna International	$42.67 billion	0.40	$829.00 million	$2.76	23.24

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

Summary

Magna International beats Stoneridge on 11 of the 15 factors compared between the two stocks.

About Stoneridge

Stoneridge, Inc., together with its subsidiaries, designs and manufactures engineered electrical and electronic systems, components, and modules for the automotive, commercial, off-highway, motorcycle, and agricultural vehicle markets in North America, South America, Europe, and internationally. The company operates through three segments: Control Devices, Electronics, and Stoneridge Brazil. The Control Devices segment offers actuators, sensors, switches, actuators, and connectors that monitor, measure, or activate specific functions within a vehicle. The Electronics segment designs and manufactures driver information systems, vision and safety systems, connectivity and compliance products, and electronic control units. Its products collect, store, and display vehicle information, such as speed, pressure, maintenance data, trip information, operator performance, temperature, distance traveled, and driver messages related to vehicle performance. This segment also offers electronic control units that regulate, coordinate, monitor, and direct the operation of the electrical system within a vehicle. The Stoneridge Brazil segment designs, manufactures, and sells vehicle tracking devices and monitoring services; vehicle security alarms and convenience accessories, including parking sensors and rearview cameras; in-vehicle audio and infotainment devices; and driver information systems and telematics solutions. The company provides its products and systems to various original equipment manufacturers and tier 1 customers, as well as aftermarket distributors. Stoneridge, Inc. was founded in 1965 and is headquartered in Novi, Michigan.

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.