Magna International Inc. Provides More than Just Dividends

 

Why Magna Stock Could Be Special

 

 


When I first told Income Investors readers about Magna International Inc. (NYSE:MGA) in September 2017, I wrote that the company was “well-positioned to deliver rising payouts to shareholders.”

 

Magna did not disappoint. Back then, MGA stock had a quarterly dividend rate of $0.275 per share. Today, it’s at $0.43 per share, marking an increase of 56.4%.

 

But dividends aren’t the only thing Magna stock investors have collected over the years; the company’s share price has also shot up. Assuming automatic dividend reinvestment, the total returns from MGA stock since my 2017 article was published is now over 95%.

 

However you look at it, this is a unique company.

 

Magna comes from the automotive sector, which is known for being cyclical. And that cyclicality is not a good thing when it comes to dividend safety. For instance, in light of the COVID-19 pandemic, Ford Motor Company (NYSE:F) suspended its quarterly dividend in March 2020, and General Motors Company (NYSE:GM) followed suit in April 2020. At the time of this writing, neither company has reinstated its dividend.

 

 

And yet, Magna International Inc., an automotive supplier, not only maintained its dividend payments in 2020, but also announced a 7.5% dividend increase in February 2021. The new dividend rate went into effect starting with the March 2021 payment.

 

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