HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
NYSE:HMC - New York Stock Exchange, Inc. - US4381283088 - ADR - Currency: USD
Overall HMC gets a fundamental rating of 5 out of 10. We evaluated HMC against 37 industry peers in the Automobiles industry. While HMC has a great profitability rating, there are quite some concerns on its financial health. HMC has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year HMC was profitable.
HMC had a positive operating cash flow in the past year.
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 2.72%, HMC belongs to the best of the industry, outperforming 81.08% of the companies in the same industry.
HMC has a Return On Equity of 6.78%. This is in the better half of the industry: HMC outperforms 78.38% of its industry peers.
With a decent Return On Invested Capital value of 3.85%, HMC is doing good in the industry, outperforming 78.38% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HMC is below the industry average of 6.67%.
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
The Profit Margin of HMC (3.85%) is better than 83.78% of its industry peers.
HMC's Profit Margin has improved in the last couple of years.
The Operating Margin of HMC (5.59%) is better than 83.78% of its industry peers.
In the last couple of years the Operating Margin of HMC has grown nicely.
HMC has a better Gross Margin (21.50%) than 86.49% of its industry peers.
HMC's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so HMC is still creating some value.
Compared to 1 year ago, HMC has less shares outstanding
Compared to 5 years ago, HMC has more shares outstanding
The debt/assets ratio for HMC is higher compared to a year ago.
2.2 Solvency
HMC has an Altman-Z score of 1.65. This is a bad value and indicates that HMC is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.65, HMC is doing good in the industry, outperforming 75.68% of the companies in the same industry.
A Debt/Equity ratio of 0.56 indicates that HMC is somewhat dependend on debt financing.
HMC has a Debt to Equity ratio (0.56) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.65 |
ROIC/WACC1.33
WACC2.89%
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's Quick ratio of 1.07 is fine compared to the rest of the industry. HMC outperforms 67.57% 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 -21.83% in the last year.
The Earnings Per Share has been decreasing by -7.46% on average over the past years.
Looking at the last year, HMC shows a small growth in Revenue. The Revenue has grown by 6.17% in the last 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)-21.83%
EPS 3Y-21.31%
EPS 5Y-7.46%
EPS Q2Q%-86%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.28%
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 18.72% yearly.
The Revenue is expected to grow by 1.72% on average over the next years.
EPS Next Y27.23%
EPS Next 2Y18.72%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year0.52%
Revenue Next 2Y1.72%
Revenue Next 3YN/A
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
A Price/Earnings ratio of 7.56 indicates a rather cheap 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 89.19% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.92, HMC is valued rather cheaply.
A Price/Forward Earnings ratio of 5.94 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 91.89% of the companies in the same industry.
HMC is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.56 | ||
| Fwd PE | 5.94 |
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 | 6.27 |
4.3 Compensation for Growth
The 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 18.72% in the coming years.
PEG (NY)0.28
PEG (5Y)N/A
EPS Next 2Y18.72%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.89%, HMC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.90, HMC pays a better dividend. On top of this HMC pays more dividend than 94.59% of the companies listed 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 | 4.89% |
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 41.61% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP41.61%
EPS Next 2Y18.72%
EPS Next 3YN/A
29.7
+0.89 (+3.09%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners41.07%
Inst Owner Change0.01%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap41.09B
Analysts76.8
Price Target31.87 (7.31%)
Short Float %0.48%
Short Ratio6.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.89% |
Yearly Dividend1.67
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)-30.64%
Min EPS beat(2)-80.57%
Max EPS beat(2)19.29%
EPS beat(4)2
Avg EPS beat(4)-29.71%
Min EPS beat(4)-80.57%
Max EPS beat(4)19.29%
EPS beat(8)5
Avg EPS beat(8)1.89%
EPS beat(12)6
Avg EPS beat(12)-1.3%
EPS beat(16)10
Avg EPS beat(16)9.75%
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)-10.93%
PT rev (3m)-10.49%
EPS NQ rev (1m)1.86%
EPS NQ rev (3m)-13.28%
EPS NY rev (1m)1.86%
EPS NY rev (3m)2.33%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.73%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.56 | ||
| Fwd PE | 5.94 | ||
| P/S | 0.27 | ||
| P/FCF | N/A | ||
| P/OCF | 20.31 | ||
| P/B | 0.48 | ||
| P/tB | 0.53 | ||
| EV/EBITDA | 6.27 |
EPS(TTM)3.93
EY13.23%
EPS(NY)5
Fwd EY16.84%
FCF(TTM)-2.78
FCFYN/A
OCF(TTM)1.46
OCFY4.92%
SpS108.54
BVpS61.69
TBVpS56.05
PEG (NY)0.28
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 | 1.65 |
F-Score4
WACC2.89%
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)-21.83%
EPS 3Y-21.31%
EPS 5Y-7.46%
EPS Q2Q%-86%
EPS Next Y27.23%
EPS Next 2Y18.72%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)6.17%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.28%
Revenue Next Year0.52%
Revenue Next 2Y1.72%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-12.19%
EBIT growth 3Y11.68%
EBIT growth 5Y13.88%
EBIT Next Year23510.5%
EBIT Next 3Y536.87%
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%