Linamar trades at a compelling 8.0 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 executing a normal course issuer bid that has retired 1.8 million shares since November 2024.
LINAMAR CORP. (Toronto symbol LNR) makes a variety of automotive parts, including cylinder heads and cylinder blocks. It also makes self-propelled, scissor-type work platforms under the Skyjack brand, and agricultural harvesting equipment.
In November 2025, Linamar completed the purchase of manufacturing plants in the U.S. from Aludyne Inc., a maker of aluminum auto parts such as subframes, control arms and axle housings. Those products complement the company’s existing structures and chassis business. The price was $300 million U.S.
Linamar has also acquired a facility in Leipzig, Germany from Switzerland-based industrial company George Fischer. This plant makes iron castings for commercial vehicles, as well as construction, forestry and agricultural equipment. The company paid 45 million euros (or $73 million Canadian).
Both purchases should immediately add to Linamar’s earnings.
Linamar gains in 2025 despite U.S. tariffs
In the three months ended June 30, 2025, Linamar’s revenue fell 7.2%, to $2.64 billion from $2.85 billion a year earlier. That missed the consensus forecast of $2.71 billion.
Sales of automotive equipment (74% of the total) declined 0.4% on slowing production of new cars, particularly electric vehicles, in the U.S. and Europe. Sales of industrial products (26%) also fell 22.7% on lower demand for Skyjack and agricultural equipment. However, the company continues to gain market share.
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If you factor out foreign exchange gains and unusual items, earnings in the quarter fell 10.6%, to $168.4 million from $188.4 million. Linamar spent $57.9 million on share buybacks in the first half of 2025, which is why earnings per share declined at a slower rate of 8.2%, to $2.81 from $3.06. Even so, that beat the consensus estimate of $2.76.
Meantime, despite the new U.S. tariffs, the stock has gained over 40% since the start of 2025. That’s because Linamar’s auto parts currently comply with the U.S.-Mexico-Canada trade agreement. Moreover, the company’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 now trades at just 8.0 times Linamar’s projected 2025 earnings of $9.86 a share. The $1.16 dividend yields 1.5%
Recommendation in The Successful Investor: Linamar Corp. is a buy.
