By The Numbers

How Magna stacks up against the competition

 

There is no company, the experts will tell you, quite like Magna International Inc. A producer of 5,000 different parts and components for new cars, it is much more diversified than most companies in the industry. "They'll build anything they can make money on," says Charles Harris, an analyst with Value Line Inc. "And that's unusual."

Unusual or not, Magna still has to stack itself up against the competition, not only for contracts but for investment capital. Some of its competitors are divisions of the auto manufacturers themselves, while others are privately held corporations, so no company-to-company comparison can hope to be complete. Nonetheless, measuring Magna's financials against those of a sampling of other public companies in the industry suggests a few of its strengths and weaknesses.

In sales growth, many companies have benefited from a trend among the Big Three to contract out for more parts. But Magna handily outstrips the pack:

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Magna's strategy is not without its costs, however. The company duplicates assets, particularly bricks and mortar, and may not achieve the economies of scale enjoyed by competitors with bigger factories. The cost shows up in what accountants call turnover, or dollars of sales per dollar of assets. Here, Magna lags far behind:

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Nevertheless, Magna hasn't sacrificed much profitability pursuing its small-plant strategy. Its operating profit is only a few percentage points lower than most in the comparison group, and the company's exceptionally fast growth probably accounts for most or all of the difference:

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