For those who appreciate value investing, NYSE:HMC is a compelling option with its solid fundamentals.

HONDA MOTOR CO LTD-SPONS ADR (NYSE:HMC) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:HMC showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Evaluating Valuation: NYSE:HMC

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:HMC boasts a 9 out of 10:

• HMC is valuated reasonably with a Price/Earnings ratio of 9.57.
• HMC's Price/Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 84.21% of the companies in the same industry.
• The average S&P500 Price/Earnings ratio is at 25.89. HMC is valued rather cheaply when compared to this.
• Based on the Price/Forward Earnings ratio of 8.63, the valuation of HMC can be described as reasonable.
• HMC's Price/Forward Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 86.84% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 18.97. HMC is valued rather cheaply when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 89.47% of the companies listed in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 97.37% of the companies listed in the same industry.
• HMC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• HMC has a very decent profitability rating, which may justify a higher PE ratio.
• A more expensive valuation may be justified as HMC's earnings are expected to grow with 15.63% in the coming years.

Understanding NYSE:HMC's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:HMC has achieved a 6:

• The Return On Assets of HMC (3.27%) is better than 76.32% of its industry peers.
• The Return On Equity of HMC (7.21%) is better than 73.68% of its industry peers.
• HMC's Return On Invested Capital of 3.73% is fine compared to the rest of the industry. HMC outperforms 76.32% of its industry peers.
• The last Return On Invested Capital (3.73%) for HMC is above the 3 year average (3.16%), which is a sign of increasing profitability.
• HMC has a better Profit Margin (4.89%) than 81.58% of its industry peers.
• With a decent Operating Margin value of 5.38%, HMC is doing good in the industry, outperforming 78.95% of the companies in the same industry.
• Looking at the Gross Margin, with a value of 20.13%, HMC belongs to the top of the industry, outperforming 84.21% of the companies in the same industry.

Evaluating Health: NYSE:HMC

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:HMC has achieved a 6 out of 10:

• The Altman-Z score of HMC (1.82) is better than 71.05% of its industry peers.
• HMC has a better Debt to FCF ratio (7.69) than 84.21% of its industry peers.
• A Debt/Equity ratio of 0.41 indicates that HMC is not too dependend on debt financing.

Looking at the Growth

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:HMC has achieved a 5 out of 10:

• The Earnings Per Share has grown by an impressive 46.62% over the past year.
• Looking at the last year, HMC shows a quite strong growth in Revenue. The Revenue has grown by 19.63% in the last year.
• The Earnings Per Share is expected to grow by 15.63% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of HMC contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.