HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
NYSE:HMC - US4381283088 - ADR
34.61 USD
+0.69 (+2.03%)
34.61 USD
0 (0%)
HMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 37 industry peers in the Automobiles industry. HMC scores excellent on profitability, but there are some minor concerns on its financial health. HMC is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
HMC had positive earnings in the past year.
In the past year HMC had a positive cash flow from operations.
HMC had positive earnings in each of the past 5 years.
In the past 5 years HMC always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of HMC (2.72%) is better than 86.49% of its industry peers.
HMC has a better Return On Equity (6.78%) than 81.08% of its industry peers.
The Return On Invested Capital of HMC (3.85%) is better than 83.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HMC is in line with the industry average of 5.32%.
The last Return On Invested Capital (3.85%) for HMC is above the 3 year average (3.64%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.72% | ||
| ROE | 6.78% | ||
| ROIC | 3.85% |
ROA(3y)3.02%
ROA(5y)3%
ROE(3y)7.11%
ROE(5y)7.06%
ROIC(3y)3.64%
ROIC(5y)3.36%
1.3 Margins
HMC has a Profit Margin of 3.85%. This is amongst the best in the industry. HMC outperforms 86.49% of its industry peers.
In the last couple of years the Profit Margin of HMC has grown nicely.
The Operating Margin of HMC (5.59%) is better than 89.19% of its industry peers.
In the last couple of years the Operating Margin of HMC has grown nicely.
With an excellent Gross Margin value of 21.50%, HMC belongs to the best of the industry, outperforming 86.49% of the companies in the same industry.
In the last couple of years the Gross Margin of HMC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.59% | ||
| PM (TTM) | 3.85% | ||
| GM | 21.5% |
OM growth 3Y-2.23%
OM growth 5Y5.68%
PM growth 3Y-7.43%
PM growth 5Y4.77%
GM growth 3Y1.59%
GM growth 5Y0.84%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), HMC is creating some value.
HMC has less shares outstanding than it did 1 year ago.
HMC has more shares outstanding than it did 5 years ago.
The debt/assets ratio for HMC is higher compared to a year ago.
2.2 Solvency
HMC has an Altman-Z score of 1.68. This is a bad value and indicates that HMC is not financially healthy and even has some risk of bankruptcy.
HMC's Altman-Z score of 1.68 is fine compared to the rest of the industry. HMC outperforms 75.68% of its industry peers.
HMC has a Debt/Equity ratio of 0.56. This is a neutral value indicating HMC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.56, HMC is in the better half of the industry, outperforming 64.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.68 |
ROIC/WACC1.33
WACC2.9%
2.3 Liquidity
HMC has a Current Ratio of 1.36. This is a normal value and indicates that HMC is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of HMC (1.36) is better than 62.16% of its industry peers.
HMC has a Quick Ratio of 1.07. This is a normal value and indicates that HMC is financially healthy and should not expect problems in meeting its short term obligations.
HMC has a Quick ratio of 1.07. This is in the better half of the industry: HMC outperforms 70.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The earnings per share for HMC have decreased strongly by -38.67% in the last year.
HMC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.21% yearly.
HMC shows a small growth in Revenue. In the last year, the Revenue has grown by 6.17%.
HMC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.75% yearly.
EPS 1Y (TTM)-38.67%
EPS 3Y-20.96%
EPS 5Y-7.21%
EPS Q2Q%-42.79%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.2%
3.2 Future
The Earnings Per Share is expected to grow by 17.93% on average over the next years. This is quite good.
HMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.53% yearly.
EPS Next Y25.54%
EPS Next 2Y17.93%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-2.63%
Revenue Next 2Y-0.16%
Revenue Next 3Y0.53%
Revenue Next 5YN/A
3.3 Evolution
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
HMC is valuated reasonably with a Price/Earnings ratio of 10.88.
Based on the Price/Earnings ratio, HMC is valued cheaply inside the industry as 91.89% of the companies are valued more expensively.
HMC is valuated cheaply when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 6.30, the valuation of HMC can be described as very cheap.
Based on the Price/Forward Earnings ratio, HMC is valued cheaply inside the industry as 89.19% of the companies are valued more expensively.
HMC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.88 | ||
| Fwd PE | 6.3 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaper than 91.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.82 |
4.3 Compensation for Growth
HMC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
HMC has an outstanding 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 17.93% in the coming years.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y17.93%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.31%, HMC is a good candidate for dividend investing.
HMC's Dividend Yield is rather good when compared to the industry average which is at 3.54. HMC pays more dividend than 91.89% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.31% |
5.2 History
The dividend of HMC decreases each year by -7.66%.
HMC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-7.66%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
41.61% of the earnings are spent on dividend by HMC. This is a bit on the high side, but may be sustainable.
DP41.61%
EPS Next 2Y17.93%
EPS Next 3YN/A
34.61
+0.69 (+2.03%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners41.07%
Inst Owner Change-28.87%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap47.19B
Analysts75.2
Price Target32.77 (-5.32%)
Short Float %0.4%
Short Ratio4.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.31% |
Yearly Dividend1.68
Dividend Growth(5Y)-7.66%
DP41.61%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-27.29%
Min EPS beat(2)-73.88%
Max EPS beat(2)19.29%
EPS beat(4)2
Avg EPS beat(4)-28.04%
Min EPS beat(4)-73.88%
Max EPS beat(4)19.29%
EPS beat(8)5
Avg EPS beat(8)2.72%
EPS beat(12)6
Avg EPS beat(12)-0.74%
EPS beat(16)10
Avg EPS beat(16)10.16%
Revenue beat(2)1
Avg Revenue beat(2)0.46%
Min Revenue beat(2)-0.89%
Max Revenue beat(2)1.81%
Revenue beat(4)3
Avg Revenue beat(4)0.68%
Min Revenue beat(4)-0.89%
Max Revenue beat(4)1.81%
Revenue beat(8)4
Avg Revenue beat(8)0.08%
Revenue beat(12)6
Avg Revenue beat(12)0.08%
Revenue beat(16)8
Avg Revenue beat(16)0.23%
PT rev (1m)2.8%
PT rev (3m)-8.43%
EPS NQ rev (1m)11.02%
EPS NQ rev (3m)-1.35%
EPS NY rev (1m)1.58%
EPS NY rev (3m)1.57%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)-1.2%
Revenue NY rev (1m)-3.13%
Revenue NY rev (3m)-3.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.88 | ||
| Fwd PE | 6.3 | ||
| P/S | 0.32 | ||
| P/FCF | N/A | ||
| P/OCF | 23.88 | ||
| P/B | 0.57 | ||
| P/tB | 0.62 | ||
| EV/EBITDA | 6.82 |
EPS(TTM)3.18
EY9.19%
EPS(NY)5.49
Fwd EY15.87%
FCF(TTM)-2.75
FCFYN/A
OCF(TTM)1.45
OCFY4.19%
SpS107.57
BVpS61.14
TBVpS55.55
PEG (NY)0.43
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.72% | ||
| ROE | 6.78% | ||
| ROCE | 5.48% | ||
| ROIC | 3.85% | ||
| ROICexc | 4.89% | ||
| ROICexgc | 5.23% | ||
| OM | 5.59% | ||
| PM (TTM) | 3.85% | ||
| GM | 21.5% | ||
| FCFM | N/A |
ROA(3y)3.02%
ROA(5y)3%
ROE(3y)7.11%
ROE(5y)7.06%
ROIC(3y)3.64%
ROIC(5y)3.36%
ROICexc(3y)4.65%
ROICexc(5y)4.25%
ROICexgc(3y)4.94%
ROICexgc(5y)15.11%
ROCE(3y)5.42%
ROCE(5y)5.03%
ROICexcg growth 3Y-46.73%
ROICexcg growth 5Y7.95%
ROICexc growth 3Y6.2%
ROICexc growth 5Y7.78%
OM growth 3Y-2.23%
OM growth 5Y5.68%
PM growth 3Y-7.43%
PM growth 5Y4.77%
GM growth 3Y1.59%
GM growth 5Y0.84%
F-Score4
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.55 | ||
| Cap/Depr | 114.08% | ||
| Cap/Sales | 3.91% | ||
| Interest Coverage | 2.76 | ||
| Cash Conversion | 14.93% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 1.68 |
F-Score4
WACC2.9%
ROIC/WACC1.33
Cap/Depr(3y)92.78%
Cap/Depr(5y)88.03%
Cap/Sales(3y)3.54%
Cap/Sales(5y)3.58%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-38.67%
EPS 3Y-20.96%
EPS 5Y-7.21%
EPS Q2Q%-42.79%
EPS Next Y25.54%
EPS Next 2Y17.93%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)6.17%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.2%
Revenue Next Year-2.63%
Revenue Next 2Y-0.16%
Revenue Next 3Y0.53%
Revenue Next 5YN/A
EBIT growth 1Y-12.19%
EBIT growth 3Y11.68%
EBIT growth 5Y13.88%
EBIT Next Year24069.4%
EBIT Next 3Y541.86%
EBIT Next 5YN/A
FCF growth 1Y-500.6%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-60.9%
OCF growth 3Y-44.18%
OCF growth 5Y-21.49%