HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HMC - US4381283088 - ADR
30.08 USD
-0.34 (-1.12%)
Overall HMC gets a fundamental rating of 5 out of 10. We evaluated HMC against 35 industry peers in the Automobiles industry. While HMC belongs to the best of the industry regarding profitability, there are concerns on its financial health. HMC is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year HMC was profitable.
- In the past year HMC had a positive cash flow from operations.
- In the past 5 years HMC has always been profitable.
- In the past 5 years HMC always reported a positive cash flow from operatings.
1.2 Ratios
- With an excellent Return On Assets value of 2.07%, HMC belongs to the best of the industry, outperforming 82.86% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 5.46%, HMC is in the better half of the industry, outperforming 77.14% of the companies in the same industry.
- HMC's Return On Invested Capital of 2.77% is fine compared to the rest of the industry. HMC outperforms 80.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for HMC is below the industry average of 5.56%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.07% | ||
| ROE | 5.46% | ||
| ROIC | 2.77% |
ROA(3y)3.02%
ROA(5y)3%
ROE(3y)7.11%
ROE(5y)7.06%
ROIC(3y)3.54%
ROIC(5y)3.3%
1.3 Margins
- The Profit Margin of HMC (3.03%) is better than 85.71% of its industry peers.
- HMC's Profit Margin has improved in the last couple of years.
- HMC has a Operating Margin of 4.22%. This is amongst the best in the industry. HMC outperforms 85.71% of its industry peers.
- HMC's Operating Margin has improved in the last couple of years.
- HMC's Gross Margin of 20.75% is amongst the best of the industry. HMC outperforms 85.71% of its industry peers.
- 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 | 4.22% | ||
| PM (TTM) | 3.03% | ||
| GM | 20.75% |
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
- HMC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- HMC has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for HMC has been increased compared to 5 years ago.
- The debt/assets ratio for HMC is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.61, we must say that HMC is in the distress zone and has some risk of bankruptcy.
- With a decent Altman-Z score value of 1.61, HMC is doing good in the industry, outperforming 77.14% of the companies in the same industry.
- A Debt/Equity ratio of 0.68 indicates that HMC is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.68, HMC perfoms like the industry average, outperforming 51.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.61 |
ROIC/WACC0.96
WACC2.89%
2.3 Liquidity
- HMC has a Current Ratio of 1.41. 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 Current ratio of 1.41. This is comparable to the rest of the industry: HMC outperforms 57.14% of its industry peers.
- HMC has a Quick Ratio of 1.13. This is a normal value and indicates that HMC is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.13, HMC is in the better half of the industry, outperforming 68.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.41 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
- HMC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -25.93%.
- Measured over the past years, HMC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.59% on average per year.
- The Revenue has decreased by -0.43% in the past year.
- Measured over the past years, HMC shows a small growth in Revenue. The Revenue has been growing by 7.75% on average per year.
EPS 1Y (TTM)-25.93%
EPS 3Y9.3%
EPS 5Y15.59%
EPS Q2Q%35.23%
Revenue 1Y (TTM)-0.43%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.86%
3.2 Future
- HMC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.62% yearly.
- The Revenue is expected to grow by 1.75% on average over the next years.
EPS Next Y-30.02%
EPS Next 2Y4.78%
EPS Next 3Y8.62%
EPS Next 5YN/A
Revenue Next Year-2.02%
Revenue Next 2Y1.13%
Revenue Next 3Y1.75%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 10.27, which indicates a very decent valuation of HMC.
- Compared to the rest of the industry, the Price/Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 88.57% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of HMC to the average of the S&P500 Index (27.21), we can say HMC is valued rather cheaply.
- HMC is valuated cheaply with a Price/Forward Earnings ratio of 7.91.
- 91.43% of the companies in the same industry are more expensive than HMC, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of HMC to the average of the S&P500 Index (25.98), we can say HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.27 | ||
| Fwd PE | 7.91 |
4.2 Price Multiples
- 88.57% of the companies in the same industry are more expensive than HMC, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.82 |
4.3 Compensation for Growth
- HMC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.66
EPS Next 2Y4.78%
EPS Next 3Y8.62%
5. Dividend
5.1 Amount
- HMC has a Yearly Dividend Yield of 4.27%, which is a nice return.
- Compared to an average industry Dividend Yield of 0.84, HMC pays a better dividend. On top of this HMC pays more dividend than 94.29% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.27% |
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
- HMC pays out 47.07% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP47.07%
EPS Next 2Y4.78%
EPS Next 3Y8.62%
HONDA MOTOR CO LTD-SPONS ADR / HMC FAQ
What is the fundamental rating for HMC stock?
ChartMill assigns a fundamental rating of 5 / 10 to HMC.
Can you provide the valuation status for HONDA MOTOR CO LTD-SPONS ADR?
ChartMill assigns a valuation rating of 6 / 10 to HONDA MOTOR CO LTD-SPONS ADR (HMC). This can be considered as Fairly Valued.
Can you provide the profitability details for HONDA MOTOR CO LTD-SPONS ADR?
HONDA MOTOR CO LTD-SPONS ADR (HMC) has a profitability rating of 8 / 10.
What is the valuation of HONDA MOTOR CO LTD-SPONS ADR based on its PE and PB ratios?
The Price/Earnings (PE) ratio for HONDA MOTOR CO LTD-SPONS ADR (HMC) is 10.27 and the Price/Book (PB) ratio is 0.52.
What is the financial health of HONDA MOTOR CO LTD-SPONS ADR (HMC) stock?
The financial health rating of HONDA MOTOR CO LTD-SPONS ADR (HMC) is 3 / 10.