01:20 PM EST, 01/16/2025 (MT Newswires) -- Magna is trading 27% below its fair value estimate of $87 per share, writes Morningstar Financial Research, adding that Magna's capabilities are so broad that it can nearly design, develop, supply, and assemble vehicles all on its own.

The company has raised its dividend for 14 consecutive years, with a 2023 payout ratio of 33.5%. The firm's approach to capital allocation reflects a sound balance sheet, fair investment, and mixed shareholder distributions. "Reinvestment in the business is the most likely key driver of total shareholder returns," says Morningstar strategist David Whiston.

Management says the primary deployment of capital is to preserve liquidity and high investment-grade credit rating metrics, reinvest in operations, and return excess cash to shareholders including continued dividend per share growth with share repurchases.

Magna has a four-star Morningstar rating, with a fair value estimate of $87.

Price: 58.23, Change: -0.50, Percent Change: -0.85