Reviewing Goodyear Tire & Rubber (NASDAQ:GT) and Magna International (NYSE:MGA)

Magna International (NYSE:MGA) and Goodyear Tire & Rubber (NASDAQ:GT) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, dividends, profitability, earnings, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

67.5% of Magna International shares are owned by institutional investors. Comparatively, 84.2% of Goodyear Tire & Rubber shares are owned by institutional investors. 0.5% of Magna International shares are owned by insiders. Comparatively, 0.5% of Goodyear Tire & Rubber shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Magna International and Goodyear Tire & Rubber, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magna International	1	13	4	1	2.26
Goodyear Tire & Rubber	3	2	2	0	1.86

Magna International currently has a consensus price target of $68.33, suggesting a potential upside of 10.71%. Goodyear Tire & Rubber has a consensus price target of $7.46, suggesting a potential upside of 81.07%. Given Goodyear Tire & Rubber’s higher probable upside, analysts plainly believe Goodyear Tire & Rubber is more favorable than Magna International.

Volatility & Risk

Magna International has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Goodyear Tire & Rubber has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.

Valuation and Earnings

This table compares Magna International and Goodyear Tire & Rubber”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magna International	$42.01 billion	0.38	$829.00 million	$3.12	19.78
Goodyear Tire & Rubber	$18.28 billion	0.06	-$1.72 billion	($2.03)	-2.03

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

Profitability

This table compares Magna International and Goodyear Tire & Rubber’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magna International	1.99%	16.26%	6.37%
Goodyear Tire & Rubber	-3.33%	-6.69%	-1.12%

Summary

Magna International beats Goodyear Tire & Rubber on 12 of the 15 factors compared between the two stocks.

About Magna International

Magna International is a Canadian mobility technology supplier that designs and manufactures components, systems and complete vehicles for automakers. Its products and services support a range of vehicle types, including those with electric and advanced driver-assistance technologies. The company’s operations include body and exterior systems, seating, powertrain and electronics, as well as vehicle engineering and contract manufacturing. Its portfolio also includes products such as mirrors, lighting systems and roof systems.

About Goodyear Tire & Rubber

The Goodyear Tire & Rubber Company is a global manufacturer of tires and related products and services. Founded in Akron, Ohio, in 1898, the company makes tires for passenger and light trucks, commercial vehicles, aircraft, and off-road equipment, as well as for original-equipment and replacement markets. Goodyear sells products under brands including Goodyear and Cooper. Its tire-related offerings also include retreading, vehicle and fleet services, and solutions for commercial customers. The company serves customers across markets around the world and is headquartered in Akron, Ohio.