Analyzing Horizon Global Corporation (HZN) and Magna International (NYSE:MGA)

Magna International (NYSE: MGA) and Horizon Global Corporation (NYSE:HZN) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Valuation and Earnings

This table compares Magna International and Horizon Global Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Magna International $37.16 billion 0.47 $4.01 billion $5.54 8.32
Horizon Global Corporation $792.20 million 0.54 $58.76 million ($0.67) -25.55

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

Dividends

Magna International pays an annual dividend of $1.10 per share and has a dividend yield of 2.4%. Horizon Global Corporation does not pay a dividend. Magna International pays out 19.9% of its earnings in the form of a dividend. Magna International has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

60.4% of Magna International shares are owned by institutional investors. Comparatively, 93.7% of Horizon Global Corporation shares are owned by institutional investors. 1.3% of Horizon Global Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Magna International 5.73% 20.01% 9.12%
Horizon Global Corporation -1.45% 18.86% 2.76%

Risk and Volatility

Magna International has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Horizon Global Corporation has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Magna International and Horizon Global Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magna International 1 3 8 1 2.69
Horizon Global Corporation 0 3 4 0 2.57

Magna International presently has a consensus target price of $53.67, suggesting a potential upside of 16.41%. Horizon Global Corporation has a consensus target price of $20.17, suggesting a potential upside of 17.80%. Given Horizon Global Corporation’s higher probable upside, analysts clearly believe Horizon Global Corporation is more favorable than Magna International.

Summary

Magna International beats Horizon Global Corporation on 11 of the 18 factors compared between the two stocks.

Magna International Company Profile

Magna International Inc. (Magna) is a global automotive supplier. The Company’s segments are North America, Europe, Asia, Rest of World, and Corporate and Other. The Company’s product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure, and roof systems and modules, as well as vehicle engineering and contract manufacturing. The Company has over 320 manufacturing operations and approximately 100 product development, engineering and sales centers in over 30 countries. It provides a range of body, chassis and engineering solutions to its original equipment manufacturer (OEM) customers. It has capabilities in powertrain design, development, testing and manufacturing. It offers bumper fascia systems, exterior trim and modular systems. It offers exterior and interior mirror systems. It offers sealing, trim, engineered glass and module systems. It offers softtops, retractable hardtops, modular tops and hardtops.

Horizon Global Corporation Company Profile

Horizon Global Corporation is a designer, manufacturer and distributor of a range of custom-engineered towing, trailering, cargo management and other products serving the automotive aftermarket, retail and original equipment (OE) channels. The Company operates through three segments: Horizon Americas, Horizon Asia-Pacific, and Horizon Europe-Africa. Its towing product category includes devices and accessories installed on a tow-vehicle for the purpose of attaching a trailer and camper, among others, such as hitches and other towing accessories. Its trailering product category includes control devices and components of the trailer itself, such as brake controls and brake replacement parts. Its cargo management product category includes a range of products used to facilitate the transportation of various forms of cargo, to secure that cargo or to organize items. Its other product category includes a range of items, such as tubular push bars, side steps, and commercial brooms and brushes.

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