Linamar trades at a compelling 7.4 times forecast earnings, representing a significant opportunity in the automotive supply sector. This valuation creates a margin of safety.
What’s more, the firm’s strategy has positioned it advantageously in an industry transitioning to electrification. Unlike powertrain suppliers facing technology disruption, structural and chassis components remain essential across both internal combustion engines and electric vehicles. Heavy R&D investments in electric axle systems, battery trays, and thermal management products create expansion opportunities as content per vehicle increases across the EV market.
Meanwhile the company maintains a strong balance sheet—and company remains committed to the dividend while simultaneously buying back shares.
LINAMAR CORP. (Toronto symbol LNR; www.linamar.com) makes a variety of automotive parts. This business provides about 70% of its sales. The remaining 30% comes from making self-propelled, scissor-type work platforms under the Skyjack brand, and agricultural harvesting equipment.
Canada accounts for 50% of its revenue, followed by the rest of North America (20%), and Europe and Asia (30%).
Linamar continues to grow with complementary acquisitions.
In December 2025, it paid $42.89 million for a facility in Leipzig, Germany, from Switzerland-based industrial company Georg Fischer. This plant makes iron castings for commercial vehicles, as well as construction, forestry and agricultural equipment
In March 2026, Linamar formed a new alliance with Regen Resources Recovery Corp. to process graphite for batteries that power electric vehicles (EVs).
Regen currently holds about 340,000 tonnes of graphite that Linamar plans to use to make batteries at its facility in Welland, Ontario. The partners have not yet said when they plan to begin production but did confirm they have received interest from a potential customer.
Also in March 2026, Linamar agreed to buy two factories in Germany from Winning BLW. These facilities make gears and other components for a variety of vehicles.
The purchase nicely complements Linamar’s existing operations in Germany. What’s more, they already supply gears to some of the company’s current European customers.
Linamar has not yet said how much it will pay for these assets. However, they will add $200 million to its annual revenue of about $10.2 billion and immediately add to its earnings.
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Linamar’s valuation is low despite higher sales and earnings
In the three months ended December 31, 2025, Linamar’s sales rose 5.9%, to $2.52 billion from $2.38 billion a year earlier. That beat the consensus forecast of $2.47 billion. Sales of automotive equipment (78% of the total) rose 12.9% on new product launches and acquisitions. However, sales of industrial products (22%) fell 13.2% on lower demand for Skyjack and agricultural equipment. However, the company continues to gain market share. If you factor out foreign exchange gains and unusual items, earnings in the quarter rose 22.0%, to $136.4 million from $111.8 million. Linamar spent $19.7 million on share buybacks in the quarter, which is why earnings per share improved at a faster rate of 25.3%, to $2.28 from $1.82. That beat the consensus estimate of $1.97.
Most of Linamar’s auto parts currently comply with the U.S.-Mexico-Canada trade agreement, which has limited the impact of the new U.S. tariffs. Moreover, Linamar’s industrial products operations in Canada and Europe mainly supply domestic markets, so U.S. tariffs have had little impact.
As for U.S. tariffs on steel and aluminum imports, the company’s contracts with its customers let it adjust the terms based on changing prices for those metals. That cuts its risk.
The stock trades at just 7.4 times the company’s projected 2026 earnings of $11.49 a share. The $1.16 dividend yields 1.4%.
Recommendation in The Successful Investor: Linamar Corp. is a buy.
