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 is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
HMC had positive earnings in the past year.
HMC had a positive operating cash flow in the past year.
Each year in the past 5 years HMC has been profitable.
HMC had a positive operating cash flow in each of the past 5 years.
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 better Return On Equity (6.78%) than 78.38% of its industry peers.
HMC has a better Return On Invested Capital (3.85%) than 78.38% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HMC is below the industry average of 6.62%.
The 3 year average ROIC (3.64%) for HMC is below the current ROIC(3.85%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 3.85%, HMC belongs to the top 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.
The Operating Margin of HMC (5.59%) is better than 83.78% of its industry peers.
HMC's Operating Margin has improved in the last couple of years.
HMC's Gross Margin of 21.50% is amongst the best of the industry. HMC outperforms 86.49% 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 | 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.
HMC has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, HMC has more shares outstanding
HMC has a worse debt/assets ratio than last year.
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.
HMC's Altman-Z score of 1.65 is fine compared to the rest of the industry. HMC outperforms 78.38% 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.
The Debt to Equity ratio of HMC (0.56) is comparable to the rest of the industry.
| 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.
HMC has a better Current ratio (1.36) than 62.16% of its industry peers.
A Quick Ratio of 1.07 indicates that HMC should not have too much problems paying its short term obligations.
The Quick ratio of HMC (1.07) is better than 67.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
HMC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -21.83%.
The Earnings Per Share has been decreasing by -7.46% on average over the past years.
The Revenue has been growing slightly by 6.17% 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)-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.
HMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.72% yearly.
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
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
A Price/Earnings ratio of 7.53 indicates a rather cheap valuation of HMC.
91.89% of the companies in the same industry are more expensive than HMC, based on the Price/Earnings ratio.
HMC is valuated cheaply when we compare the Price/Earnings ratio to 27.28, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 5.92, the valuation of HMC can be described as very cheap.
Based on the Price/Forward Earnings ratio, HMC is valued cheaper than 91.89% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. HMC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.53 | ||
| Fwd PE | 5.92 |
4.2 Price Multiples
HMC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HMC is cheaper than 91.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.35 |
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 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 5.07%, HMC is a good candidate for dividend investing.
HMC's Dividend Yield is rather good when compared to the industry average which is at 3.84. HMC pays more dividend than 94.59% of the companies in the same industry.
HMC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.07% |
5.2 History
The dividend of HMC decreases each year by -7.66%.
HMC has paid a dividend for at least 10 years, which is 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 2Y18.72%
EPS Next 3YN/A
29.68
+0.48 (+1.64%)
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 Cap41.06B
Analysts76.8
Price Target31.87 (7.38%)
Short Float %0.43%
Short Ratio6.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.07% |
Yearly Dividend1.69
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)-10.42%
EPS NQ rev (1m)1.86%
EPS NQ rev (3m)-13.28%
EPS NY rev (1m)1.86%
EPS NY rev (3m)0.24%
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 | 7.53 | ||
| Fwd PE | 5.92 | ||
| P/S | 0.27 | ||
| P/FCF | N/A | ||
| P/OCF | 20.26 | ||
| P/B | 0.48 | ||
| P/tB | 0.53 | ||
| EV/EBITDA | 6.35 |
EPS(TTM)3.94
EY13.27%
EPS(NY)5.01
Fwd EY16.89%
FCF(TTM)-2.78
FCFYN/A
OCF(TTM)1.46
OCFY4.94%
SpS108.76
BVpS61.81
TBVpS56.16
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 Year23463.7%
EBIT Next 3Y536.45%
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%