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Why I’m Buying Magna Stock Today

Magna International (TSX:MG)(NYSE:MGA) is an Aurora-based company that designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks around the world. Shares of this auto stock have dropped 25% in 2022 as of close on November 28. That has pushed the stock into negative territory in the year-over-year period.

The company unveiled its third quarter fiscal 2022 earnings on November 4. Magna posted sales growth of 17% to $9.3 billion. It posted sales growth of 27% excluding foreign currency translation and acquisitions net of divestitures. Magna reported net income of $289 million or $1.00 per diluted share – up from $11 million or $0.04 per diluted share in the third quarter of fiscal 2021. Meanwhile, it delivered adjusted EBIT of $441 million and adjusted diluted EPS of $1.07 compared to adjusted EBIT of $229 million or $0.56 in adjusted diluted EPS in the previous year.

In the first nine months of fiscal 2022, Magna posted sales growth of 4% to $28.3 billion. Global light vehicle production increased 6% as demand as steadily rebounded in the aftermath of the global COVID-19 pandemic. Looking ahead, Magna is projecting total sales between $37.4 - $38.4 billion and an adjusted EBIT margin between 4.8% and 5.0%.

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Shares of Magna currently possess a favourable P/E ratio of 18. This stock last paid out a quarterly dividend of $0.45 per share. That represents a 2.9% yield.