NYSE:HMC, an undervalued stock with good fundamentals.

HONDA MOTOR CO LTD-SPONS ADR (NYSE:HMC) has caught the attention of our stock screener as a great value stock. NYSE:HMC excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Assessing Valuation Metrics for NYSE:HMC

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:HMC has received a 9 out of 10:

• HMC is valuated cheaply with a Price/Earnings ratio of 7.36.
• HMC's Price/Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 92.31% of the companies in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 26.11, HMC is valued rather cheaply.
• A Price/Forward Earnings ratio of 6.66 indicates a rather cheap valuation of HMC.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 94.87% of the companies listed in the same industry.
• Compared to an average S&P500 Price/Forward Earnings ratio of 21.02, HMC is valued rather cheaply.
• Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaply inside the industry as 94.87% of the companies are valued more expensively.
• HMC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HMC is cheaper than 87.18% of the companies 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 17.44% in the coming years.

Profitability Insights: NYSE:HMC

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:HMC, the assigned 7 is a significant indicator of profitability:

• HMC has a Return On Assets of 3.36%. This is in the better half of the industry: HMC outperforms 79.49% of its industry peers.
• With a decent Return On Equity value of 7.52%, HMC is doing good in the industry, outperforming 79.49% of the companies in the same industry.
• The Return On Invested Capital of HMC (3.85%) is better than 79.49% of its industry peers.
• The 3 year average ROIC (3.16%) for HMC is below the current ROIC(3.85%), indicating increased profibility in the last year.
• The Profit Margin of HMC (5.04%) is better than 82.05% of its industry peers.
• HMC has a better Operating Margin (5.56%) than 82.05% of its industry peers.
• HMC has a better Gross Margin (20.83%) than 89.74% of its industry peers.

ChartMill's Evaluation of Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:HMC has earned a 5 out of 10:

• HMC has a Altman-Z score of 1.74. This is in the better half of the industry: HMC outperforms 71.79% of its industry peers.
• HMC has a better Debt to FCF ratio (14.48) than 84.62% of its industry peers.
• HMC has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.

Analyzing Growth Metrics

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:HMC boasts a 4 out of 10:

• HMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.78%.
• HMC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.44% yearly.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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

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

Disclaimer

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.