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In a market where value is scarce, NYSE:HMC offers a refreshing opportunity with its solid fundamentals.

By Mill Chart

Last update: Nov 14, 2023

Our stock screener has spotted HONDA MOTOR CO LTD-SPONS ADR (NYSE:HMC) as an undervalued stock with solid fundamentals. NYSE:HMC shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Evaluating Valuation: NYSE:HMC

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:HMC, the assigned 8 reflects its valuation:

  • The Price/Earnings ratio is 8.45, which indicates a very decent valuation of HMC.
  • Based on the Price/Earnings ratio, HMC is valued cheaply inside the industry as 86.84% of the companies are valued more expensively.
  • The average S&P500 Price/Earnings ratio is at 23.95. HMC is valued rather cheaply when compared to this.
  • A Price/Forward Earnings ratio of 7.18 indicates a rather cheap valuation of HMC.
  • HMC's Price/Forward Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 89.47% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 18.79, HMC is valued rather cheaply.
  • Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaper than 89.47% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, HMC is valued cheaply inside the industry as 94.74% of the companies are valued more expensively.
  • The decent profitability rating of HMC may justify a higher PE ratio.

Profitability Analysis for NYSE:HMC

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:HMC has earned a 7 out of 10:

  • HMC has a better Return On Assets (3.27%) than 78.95% of its industry peers.
  • With a decent Return On Equity value of 7.21%, HMC is doing good in the industry, outperforming 76.32% of the companies in the same industry.
  • HMC has a Return On Invested Capital of 3.73%. This is in the better half of the industry: HMC outperforms 78.95% 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.
  • Looking at the Profit Margin, with a value of 4.89%, HMC belongs to the top of the industry, outperforming 81.58% of the companies in the same industry.
  • With an excellent Operating Margin value of 5.38%, HMC belongs to the best of the industry, outperforming 81.58% of the companies in the same industry.
  • With an excellent Gross Margin value of 20.13%, HMC belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.

A Closer Look at Health for 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 5 out of 10:

  • The Altman-Z score of HMC (1.78) is better than 73.68% of its industry peers.
  • The Debt to FCF ratio of HMC (7.69) is better than 84.21% of its industry peers.
  • HMC has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.

How We Gauge Growth for NYSE:HMC

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 4 out of 10:

  • HMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.63%.
  • The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of HMC for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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HONDA MOTOR CO LTD-SPONS ADR

NYSE:HMC (2/23/2024, 12:43:06 PM)

35.835

+0.09 (+0.27%)

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