China XD Plastics (NASDAQ: CXDC) and Magna International (NYSE:MGA) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.
Magna International pays an annual dividend of $1.10 per share and has a dividend yield of 1.9%. China XD Plastics does not pay a dividend. Magna International pays out 19.6% of its earnings in the form of a dividend. China XD Plastics has increased its dividend for 5 consecutive years.
11.2% of China XD Plastics shares are held by institutional investors. Comparatively, 59.7% of Magna International shares are held by institutional investors. 66.4% of China XD Plastics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a summary of current ratings and recommmendations for China XD Plastics and Magna International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China XD Plastics||0||0||0||0||N/A|
Magna International has a consensus price target of $55.80, suggesting a potential downside of 2.38%. Given Magna International’s higher possible upside, analysts plainly believe Magna International is more favorable than China XD Plastics.
Volatility and Risk
China XD Plastics has a beta of 2.59, indicating that its stock price is 159% more volatile than the S&P 500. Comparatively, Magna International has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.
Valuation and Earnings
This table compares China XD Plastics 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|
|China XD Plastics||$1.20 billion||0.19||$101.61 million||$1.35||3.37|
|Magna International||$36.45 billion||0.57||$2.03 billion||$5.61||10.19|
Magna International has higher revenue and earnings than China XD Plastics. China XD Plastics is trading at a lower price-to-earnings ratio than Magna International, indicating that it is currently the more affordable of the two stocks.
This table compares China XD Plastics and Magna International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China XD Plastics||7.16%||13.19%||4.01%|
Magna International beats China XD Plastics on 12 of the 17 factors compared between the two stocks.
China XD Plastics Company Profile
China XD Plastics Company Limited (China XD) is a specialty chemical company. The Company is engaged in the research, development, manufacture and sale of modified plastics for automotive applications in China and to a lesser extent, in Dubai, the United Arab Emirates (UAE). The Company operates in the modified plastics segment. Through its subsidiaries, Heilongjiang Xinda Enterprise Group Company Limited (HLJ Xinda Group) and AL Composites Materials FZE (Dubai Composites), the Company manufactures and sells polymer composite materials (including modified plastics), for automotive applications. The Company’s products categories include Modified Polypropylene (PP), Modified Acrylonitrile Butadiene Styrene (ABS), Modified Polyamide 66 (PA66), Modified Polyamide 6 (PA6), Modified Polyoxymethylenes (POM), Modified Polyphenylene Oxide (PPO), Plastic Alloy, Modified Polyphenylene Sulfide (PPS), Modified Polyimide (PI), Modified Polylactic Acid (PLA) and Poly Ether Ether Ketone (PEEK).
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.
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