NYSE:HMC appears to be flying under the radar despite its strong fundamentals.

Discover HONDA MOTOR CO LTD-SPONS ADR (NYSE:HMC)—an undervalued stock our stock screener has picked out. NYSE:HMC demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

How We Gauge Valuation for NYSE:HMC

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:HMC has achieved a 9 out of 10:

• Based on the Price/Earnings ratio of 8.90, the valuation of HMC can be described as reasonable.
• Compared to the rest of the industry, the Price/Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 87.18% of the companies listed in the same industry.
• HMC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.89.
• The Price/Forward Earnings ratio is 8.04, which indicates a very decent valuation of HMC.
• HMC's Price/Forward Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 89.74% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of HMC to the average of the S&P500 Index (21.57), we can say HMC is valued rather cheaply.
• 94.87% of the companies in the same industry are more expensive than HMC, based on the Enterprise Value to EBITDA ratio.
• Based on the Price/Free Cash Flow ratio, HMC is valued cheaper than 87.18% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of HMC may justify a higher PE ratio.
• A more expensive valuation may be justified as HMC's earnings are expected to grow with 17.51% in the coming years.

Assessing Profitability for NYSE:HMC

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 7:

• Looking at the Return On Assets, with a value of 3.36%, HMC is in the better half of the industry, outperforming 79.49% of the companies in the same industry.
• HMC has a Return On Equity of 7.52%. This is in the better half of the industry: HMC outperforms 79.49% of its industry peers.
• With a decent Return On Invested Capital value of 3.85%, HMC is doing good in the industry, outperforming 79.49% of the companies in the same industry.
• The 3 year average ROIC (3.16%) for HMC is below the current ROIC(3.85%), indicating increased profibility in the last year.
• HMC has a Profit Margin of 5.04%. This is amongst the best in the industry. HMC outperforms 82.05% of its industry peers.
• The Operating Margin of HMC (5.56%) is better than 82.05% of its industry peers.
• Looking at the Gross Margin, with a value of 20.83%, HMC belongs to the top of the industry, outperforming 87.18% of the companies in the same industry.

Health Analysis for NYSE:HMC

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:HMC, the assigned 5 reflects its health status:

• HMC has a better Altman-Z score (1.80) than 76.92% of its industry peers.
• HMC has a better Debt to FCF ratio (14.48) than 84.62% of its industry peers.
• A Debt/Equity ratio of 0.43 indicates that HMC is not too dependend on debt financing.

Deciphering NYSE:HMC's Growth Rating

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:HMC scores a 5 out of 10:

• Looking at the last year, HMC shows a quite strong growth in Revenue. The Revenue has grown by 17.78% in the last year.
• HMC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.51% yearly.
• Based on estimates for the next years, HMC will show a quite strong growth in Revenue. The Revenue will grow by 8.40% on average per year.
• 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.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of HMC

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.