HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
NYSE:HMC - New York Stock Exchange, Inc. - US4381283088 - ADR - Currency: USD
HMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 39 industry peers in the Automobiles industry. While HMC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HMC is not valued too expensively and it also shows a decent growth rate.
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.
Each year in the past 5 years HMC has been profitable.
In the past 5 years HMC always reported a positive cash flow from operatings.
1.2 Ratios
HMC has a better Return On Assets (3.32%) than 84.62% of its industry peers.
HMC has a Return On Equity of 7.98%. This is in the better half of the industry: HMC outperforms 76.92% of its industry peers.
HMC has a better Return On Invested Capital (4.92%) than 82.05% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HMC is below the industry average of 6.71%.
The 3 year average ROIC (3.75%) for HMC is below the current ROIC(4.92%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 7.98% | ||
| ROIC | 4.92% |
ROA(3y)3.1%
ROA(5y)2.91%
ROE(3y)7.1%
ROE(5y)6.84%
ROIC(3y)3.75%
ROIC(5y)3.43%
1.3 Margins
HMC has a Profit Margin of 4.79%. This is amongst the best in the industry. HMC outperforms 87.18% of its industry peers.
HMC's Profit Margin has improved in the last couple of years.
HMC's Operating Margin of 6.64% is amongst the best of the industry. HMC outperforms 84.62% of its industry peers.
HMC's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 21.49%, HMC belongs to the best of the industry, outperforming 82.05% 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 | 6.64% | ||
| PM (TTM) | 4.79% | ||
| GM | 21.49% |
OM growth 3Y10.51%
OM growth 5Y8.15%
PM growth 3Y2.78%
PM growth 5Y7.13%
GM growth 3Y1.37%
GM growth 5Y0.74%
2. Health
2.1 Basic Checks
HMC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying 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.
HMC has a worse debt/assets ratio than last year.
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 has a better Altman-Z score (1.68) than 82.05% of its industry peers.
HMC has a Debt/Equity ratio of 0.52. This is a neutral value indicating HMC is somewhat dependend on debt financing.
HMC's Debt to Equity ratio of 0.52 is fine compared to the rest of the industry. HMC outperforms 61.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.68 |
ROIC/WACC0.72
WACC6.85%
2.3 Liquidity
HMC has a Current Ratio of 1.38. This is a normal value and indicates that HMC is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.38, HMC is doing good in the industry, outperforming 64.10% of the companies in the same industry.
A Quick Ratio of 1.10 indicates that HMC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.10, HMC is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
HMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.79%, which is quite good.
The Earnings Per Share has been decreasing by -8.17% on average over the past years.
Looking at the last year, HMC shows a quite strong growth in Revenue. The Revenue has grown by 12.25% in the last year.
Measured over the past years, HMC shows a small growth in Revenue. The Revenue has been growing by 5.16% on average per year.
EPS 1Y (TTM)9.79%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%27.4%
Revenue 1Y (TTM)12.25%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%2.62%
3.2 Future
HMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.28% yearly.
HMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.47% yearly.
EPS Next Y-3.9%
EPS Next 2Y-0.28%
EPS Next 3Y3.28%
EPS Next 5YN/A
Revenue Next Year6.9%
Revenue Next 2Y3.73%
Revenue Next 3Y3.47%
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 accelerating.
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
HMC is valuated cheaply with a Price/Earnings ratio of 6.17.
Based on the Price/Earnings ratio, HMC is valued cheaply inside the industry as 94.87% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of HMC to the average of the S&P500 Index (23.99), we can say HMC is valued rather cheaply.
The Price/Forward Earnings ratio is 6.01, which 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 89.74% of the companies in the same industry.
HMC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.17 | ||
| Fwd PE | 6.01 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaper than 89.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.69 |
4.3 Compensation for Growth
HMC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-0.28%
EPS Next 3Y3.28%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.64%, HMC is a good candidate for dividend investing.
HMC's Dividend Yield is rather good when compared to the industry average which is at 3.77. HMC pays more dividend than 94.87% of the companies in the same industry.
HMC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.64% |
5.2 History
The dividend of HMC decreases each year by -14.82%.
HMC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-14.82%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
HMC pays out 33.35% of its income as dividend. This is a sustainable payout ratio.
DP33.35%
EPS Next 2Y-0.28%
EPS Next 3Y3.28%
30.38
-0.41 (-1.33%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners43.86%
Inst Owner Change-0.14%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap44.02B
Analysts77.6
Price Target32.32 (6.39%)
Short Float %0.48%
Short Ratio4.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.64% |
Yearly Dividend1.09
Dividend Growth(5Y)-14.82%
DP33.35%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-24.5%
Min EPS beat(2)-68.3%
Max EPS beat(2)19.29%
EPS beat(4)3
Avg EPS beat(4)14%
Min EPS beat(4)-68.3%
Max EPS beat(4)94.25%
EPS beat(8)5
Avg EPS beat(8)8.81%
EPS beat(12)7
Avg EPS beat(12)7.31%
EPS beat(16)11
Avg EPS beat(16)25.31%
Revenue beat(2)2
Avg Revenue beat(2)1.09%
Min Revenue beat(2)0.36%
Max Revenue beat(2)1.81%
Revenue beat(4)3
Avg Revenue beat(4)0.37%
Min Revenue beat(4)-2.16%
Max Revenue beat(4)1.81%
Revenue beat(8)4
Avg Revenue beat(8)-0.28%
Revenue beat(12)6
Avg Revenue beat(12)0.12%
Revenue beat(16)9
Avg Revenue beat(16)0.44%
PT rev (1m)-9.15%
PT rev (3m)4.12%
EPS NQ rev (1m)-1.49%
EPS NQ rev (3m)-11.07%
EPS NY rev (1m)3.01%
EPS NY rev (3m)7.07%
Revenue NQ rev (1m)-0.81%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)1.18%
Revenue NY rev (3m)1.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.17 | ||
| Fwd PE | 6.01 | ||
| P/S | 0.29 | ||
| P/FCF | N/A | ||
| P/OCF | 13.12 | ||
| P/B | 0.48 | ||
| P/tB | 0.52 | ||
| EV/EBITDA | 5.69 |
EPS(TTM)4.92
EY16.19%
EPS(NY)5.06
Fwd EY16.64%
FCF(TTM)-1.43
FCFYN/A
OCF(TTM)2.32
OCFY7.62%
SpS105.22
BVpS63.19
TBVpS58.06
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 7.98% | ||
| ROCE | 6.41% | ||
| ROIC | 4.92% | ||
| ROICexc | 6.4% | ||
| ROICexgc | 6.82% | ||
| OM | 6.64% | ||
| PM (TTM) | 4.79% | ||
| GM | 21.49% | ||
| FCFM | N/A |
ROA(3y)3.1%
ROA(5y)2.91%
ROE(3y)7.1%
ROE(5y)6.84%
ROIC(3y)3.75%
ROIC(5y)3.43%
ROICexc(3y)4.78%
ROICexc(5y)4.31%
ROICexgc(3y)16.09%
ROICexgc(5y)16.15%
ROCE(3y)5.21%
ROCE(5y)4.8%
ROICexcg growth 3Y-39.49%
ROICexcg growth 5Y7.24%
ROICexc growth 3Y19.37%
ROICexc growth 5Y7.24%
OM growth 3Y10.51%
OM growth 5Y8.15%
PM growth 3Y2.78%
PM growth 5Y7.13%
GM growth 3Y1.37%
GM growth 5Y0.74%
F-Score4
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.1 | ||
| Cap/Depr | 104.77% | ||
| Cap/Sales | 3.56% | ||
| Interest Coverage | 3.49 | ||
| Cash Conversion | 21.92% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 1.68 |
F-Score4
WACC6.85%
ROIC/WACC0.72
Cap/Depr(3y)79.26%
Cap/Depr(5y)82.4%
Cap/Sales(3y)3.27%
Cap/Sales(5y)3.6%
Profit Quality(3y)138.76%
Profit Quality(5y)115.71%
High Growth Momentum
Growth
EPS 1Y (TTM)9.79%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%27.4%
EPS Next Y-3.9%
EPS Next 2Y-0.28%
EPS Next 3Y3.28%
EPS Next 5YN/A
Revenue 1Y (TTM)12.25%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%2.62%
Revenue Next Year6.9%
Revenue Next 2Y3.73%
Revenue Next 3Y3.47%
Revenue Next 5YN/A
EBIT growth 1Y28.69%
EBIT growth 3Y27.92%
EBIT growth 5Y13.73%
EBIT Next Year21926%
EBIT Next 3Y511.33%
EBIT Next 5YN/A
FCF growth 1Y-116.29%
FCF growth 3Y-35.69%
FCF growth 5Y-3.79%
OCF growth 1Y-80.41%
OCF growth 3Y-11.34%
OCF growth 5Y-0.75%