Magna International Return On Equity vs. Return On Asset
| MG Stock | CAD 62.78 0.26 0.41% |
For Magna International profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Magna International to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Magna International utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Magna International's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Magna International over time as well as its relative position and ranking within its peers.
Magna |
Magna International Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Magna International's current stock value. Our valuation model uses many indicators to compare Magna International value to that of its competitors to determine the firm's financial worth. Magna International is considered to be number one stock in return on equity category among its peers. It also is considered to be number one stock in return on asset category among its peers reporting about 0.41 of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Magna International is roughly 2.41 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Magna International by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Magna International's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.Magna Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Magna International |
| = | 0.0949 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
Magna International |
| = | 0.0393 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Magna Return On Asset Comparison
Magna International is currently under evaluation in return on asset category among its peers.
Magna International Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Magna International, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Magna International will eventually generate negative long term returns. The profitability progress is the general direction of Magna International's change in net profit over the period of time. It can combine multiple indicators of Magna International, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Magna International Inc. designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks worldwide. Magna International Inc. was founded in 1957 and is headquartered in Aurora, Canada. MAGNA INTERNATIONAL operates under Auto Parts classification in Canada and is traded on Toronto Stock Exchange. It employs 161000 people.
Magna Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Magna International. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Magna International position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Magna International's important profitability drivers and their relationship over time.
Use Magna International in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Magna International position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Magna International will appreciate offsetting losses from the drop in the long position's value.Magna International Pair Trading
Magna International Pair Trading Analysis
The ability to find closely correlated positions to Magna International could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Magna International when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Magna International - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Magna International to buy it.
The correlation of Magna International is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Magna International moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Magna International moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Magna International can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Magna International position
In addition to having Magna International in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Check out Correlation Analysis. To learn how to invest in Magna Stock, please use our How to Invest in Magna International guide.You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
To fully project Magna International's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Magna International at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Magna International's income statement, its balance sheet, and the statement of cash flows.