HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
USA - NYSE:HMC - US4381283088 - ADR
29.84 USD
-0.81 (-2.64%)
29.84 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to HMC. HMC was compared to 37 industry peers in the Automobiles industry. While HMC has a great profitability rating, there are some minor concerns on its financial health. HMC has a valuation in line with the averages, 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.
HMC had positive earnings in each of the past 5 years.
HMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HMC's Return On Assets of 2.14% is amongst the best of the industry. HMC outperforms 83.78% of its industry peers.
With a decent Return On Equity value of 5.41%, HMC is doing good in the industry, outperforming 78.38% of the companies in the same industry.
HMC has a Return On Invested Capital of 3.18%. This is amongst the best in the industry. HMC outperforms 83.78% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HMC is below the industry average of 5.68%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.14% | ||
| ROE | 5.41% | ||
| ROIC | 3.18% |
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
With an excellent Profit Margin value of 2.95%, HMC belongs to the best of the industry, outperforming 83.78% of the companies in the same industry.
HMC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 4.50%, HMC belongs to the best of the industry, outperforming 86.49% of the companies in the same industry.
HMC's Operating Margin has improved in the last couple of years.
HMC has a better Gross Margin (20.99%) than 83.78% of its industry peers.
HMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.5% | ||
| PM (TTM) | 2.95% | ||
| GM | 20.99% |
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.
The number of shares outstanding for HMC has been reduced compared to 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 1.66. 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 (1.66) than 75.68% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that HMC is somewhat dependend on debt financing.
HMC has a Debt to Equity ratio of 0.59. This is in the better half of the industry: HMC outperforms 64.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.66 |
ROIC/WACC1.1
WACC2.89%
2.3 Liquidity
A Current Ratio of 1.30 indicates that HMC should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.30, HMC is doing good in the industry, outperforming 62.16% of the companies in the same industry.
A Quick Ratio of 1.01 indicates that HMC should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.01, HMC is doing good in the industry, outperforming 67.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
HMC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -38.67%.
HMC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.21% yearly.
Looking at the last year, HMC shows a small growth in Revenue. The Revenue has grown by 1.96% 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)-38.67%
EPS 3Y-20.96%
EPS 5Y-7.21%
EPS Q2Q%-42.79%
Revenue 1Y (TTM)1.96%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.2%
3.2 Future
Based on estimates for the next years, HMC will show a small growth in Earnings Per Share. The EPS will grow by 5.95% on average per year.
HMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.17% yearly.
EPS Next Y-18.42%
EPS Next 2Y3.24%
EPS Next 3Y5.95%
EPS Next 5YN/A
Revenue Next Year-1.38%
Revenue Next 2Y0.27%
Revenue Next 3Y1.17%
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.
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 9.78 indicates a reasonable valuation of HMC.
91.89% of the companies in the same industry are more expensive than HMC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.70, HMC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.38, the valuation of HMC can be described as very cheap.
91.89% of the companies in the same industry are more expensive than HMC, based on the Price/Forward Earnings ratio.
HMC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.78 | ||
| Fwd PE | 7.38 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 89.19% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.79 |
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 2Y3.24%
EPS Next 3Y5.95%
5. Dividend
5.1 Amount
HMC has a Yearly Dividend Yield of 3.04%.
Compared to an average industry Dividend Yield of 3.23, HMC pays a better dividend. On top of this HMC pays more dividend than 89.19% of the companies listed in the same industry.
HMC's Dividend Yield is a higher than the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
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 48.19% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP48.19%
EPS Next 2Y3.24%
EPS Next 3Y5.95%
29.84
-0.81 (-2.64%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners35.99%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap38.72B
Analysts74.17
Price Target34.66 (16.15%)
Short Float %0.4%
Short Ratio4.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
Yearly Dividend1.67
Dividend Growth(5Y)-7.66%
DP48.19%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-49.22%
Min EPS beat(2)-73.88%
Max EPS beat(2)-24.56%
EPS beat(4)1
Avg EPS beat(4)-36.86%
Min EPS beat(4)-73.88%
Max EPS beat(4)19.29%
EPS beat(8)4
Avg EPS beat(8)-5.4%
EPS beat(12)6
Avg EPS beat(12)-1.13%
EPS beat(16)9
Avg EPS beat(16)2.44%
Revenue beat(2)1
Avg Revenue beat(2)-0.09%
Min Revenue beat(2)-0.89%
Max Revenue beat(2)0.71%
Revenue beat(4)3
Avg Revenue beat(4)0.5%
Min Revenue beat(4)-0.89%
Max Revenue beat(4)1.81%
Revenue beat(8)5
Avg Revenue beat(8)0.21%
Revenue beat(12)6
Avg Revenue beat(12)-0.15%
Revenue beat(16)8
Avg Revenue beat(16)-0.12%
PT rev (1m)5.77%
PT rev (3m)8.73%
EPS NQ rev (1m)13.53%
EPS NQ rev (3m)11.88%
EPS NY rev (1m)3.04%
EPS NY rev (3m)-34.48%
Revenue NQ rev (1m)0.96%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0.38%
Revenue NY rev (3m)-1.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.78 | ||
| Fwd PE | 7.38 | ||
| P/S | 0.27 | ||
| P/FCF | N/A | ||
| P/OCF | 12.89 | ||
| P/B | 0.5 | ||
| P/tB | 0.55 | ||
| EV/EBITDA | 7.79 |
EPS(TTM)3.05
EY10.22%
EPS(NY)4.04
Fwd EY13.55%
FCF(TTM)-1.92
FCFYN/A
OCF(TTM)2.32
OCFY7.76%
SpS109.08
BVpS59.51
TBVpS54.15
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.14% | ||
| ROE | 5.41% | ||
| ROCE | 4.52% | ||
| ROIC | 3.18% | ||
| ROICexc | 3.94% | ||
| ROICexgc | 4.2% | ||
| OM | 4.5% | ||
| PM (TTM) | 2.95% | ||
| GM | 20.99% | ||
| FCFM | N/A |
ROA(3y)3.02%
ROA(5y)3%
ROE(3y)7.11%
ROE(5y)7.06%
ROIC(3y)3.54%
ROIC(5y)3.3%
ROICexc(3y)4.49%
ROICexc(5y)4.15%
ROICexgc(3y)4.76%
ROICexgc(5y)15%
ROCE(3y)5.42%
ROCE(5y)5.03%
ROICexcg growth 3Y-48.58%
ROICexcg growth 5Y5.67%
ROICexc growth 3Y2.72%
ROICexc growth 5Y5.65%
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 Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.08 | ||
| Cap/Depr | 114.57% | ||
| Cap/Sales | 3.89% | ||
| Interest Coverage | 2.21 | ||
| Cash Conversion | 26.9% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z | 1.66 |
F-Score4
WACC2.89%
ROIC/WACC1.1
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 Y-18.42%
EPS Next 2Y3.24%
EPS Next 3Y5.95%
EPS Next 5YN/A
Revenue 1Y (TTM)1.96%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.2%
Revenue Next Year-1.38%
Revenue Next 2Y0.27%
Revenue Next 3Y1.17%
Revenue Next 5YN/A
EBIT growth 1Y-33.91%
EBIT growth 3Y11.68%
EBIT growth 5Y13.88%
EBIT Next Year17789.6%
EBIT Next 3Y509.82%
EBIT Next 5YN/A
FCF growth 1Y-134.7%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-73.11%
OCF growth 3Y-44.18%
OCF growth 5Y-21.49%