Dorman Products (DORM) and Magna International (MGA) Critical Comparison

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Dorman Products (NASDAQ: DORM) and Magna International (NYSE:MGA) are both auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Dorman Products 11.89% 18.27% 15.39%
Magna International 5.65% 19.64% 9.02%

Valuation and Earnings

This table compares Dorman Products 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
Dorman Products $903.22 million 2.59 $106.59 million $3.37 20.85
Magna International $38.95 billion 0.52 $2.21 billion $5.96 9.67

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

Dividends

Magna International pays an annual dividend of $1.32 per share and has a dividend yield of 2.3%. Dorman Products does not pay a dividend. Magna International pays out 22.1% of its earnings in the form of a dividend. Magna International has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

75.4% of Dorman Products shares are held by institutional investors. Comparatively, 60.5% of Magna International shares are held by institutional investors. 11.9% of Dorman Products shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Dorman Products has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Magna International has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Dorman Products and Magna International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dorman Products 0 4 0 1 2.40
Magna International 2 3 12 1 2.67

Dorman Products presently has a consensus price target of $68.33, indicating a potential downside of 2.76%. Magna International has a consensus price target of $66.73, indicating a potential upside of 15.76%. Given Magna International’s stronger consensus rating and higher possible upside, analysts clearly believe Magna International is more favorable than Dorman Products.

Summary

Magna International beats Dorman Products on 10 of the 17 factors compared between the two stocks.

Dorman Products Company Profile

Dorman Products, Inc. supplies automotive replacement parts, automotive hardware, and brake products to the automotive aftermarket and mass merchandise markets in the United States, Canada, Mexico, Europe, the Middle East, and Australia. It offers original equipment dealer products, such as intake manifolds, exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation coolers, and complex electronics modules; fluid reservoirs, variable valve timing components, complex electronics, and integrated door lock actuators; and fasteners, including oil drain plugs, wheel bolts, and wheel lug nuts. The company also provides automotive replacement parts comprising door handles, keyless remotes and cases, and door hinge repairs; and heavy duty aftermarket parts for class 4-8 vehicles comprising lighting, cooling, engine management, and cab products. In addition, it offers solutions for rugged duty and fleet applications; replacement chassis part solutions; brake hardware products; electrical components; and application specific repair hardware products. The company provides its products under the OE Solutions, HELP!, HD Solutions, Premium Chassis, Premium XL, Premium RD, MAS, FirstStop, ConductTite, and AutoGrade brands through automotive aftermarket retailers, local independent parts wholesalers, national general merchandise chain retailers, mass merchants, salvage yards, and the parts distribution systems of parts manufacturers. Dorman Products, Inc. was founded in 1978 and is headquartered in Colmar, Pennsylvania.

Magna International Company Profile

Magna International Inc. designs, develops, and manufactures automotive systems, assemblies, modules, and components in North America, Europe, Asia, and South America. The company offers body systems, including exterior sheetmetal and closure systems, body structure systems, and energy management solutions; chassis systems, such as frames and chassis subframes, suspension links and arms, and chassis modules; and engineering services comprising support, program management, virtual tool, prototype build and validation, testing, and research and development services. It also provides fascia and exterior trims, liftgate and exterior modules, front end modules, ACTERO active aerodynamics, and lightweight composites; and roof systems that include softtops, retractable hardtops, modular tops, and hardtops. In addition, the company offers latching system, hinge and wire forming, power closure, electronic, door module, window system, engineered glass, sealing, trim and roof rack, testing center, and running board closures; and driveline systems, fluid pressure and controls, and metal-forming solutions. Further, it provides driver assistance systems and electronic components; and interior and exterior mirrors, actuators, electronic vision systems, door handle and overhead console technologies, and front and signal lightings. Additionally, the company offers seating systems, mechanism and seat structure solutions, foam and trim solutions, and design and development solutions; and engineering services, vehicle contract manufacturing services, and fuel systems. The company serves original equipment manufacturer, tier 1, medium and heavy truck, and non-automotive customers. Magna International Inc. was founded in 1957 and is headquartered in Aurora, Canada.

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