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 6 out of 10. We evaluated HMC against 37 industry peers in the Automobiles industry. HMC has an excellent profitability rating, but there are some minor 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.
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
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.
Looking at the Return On Equity, with a value of 6.78%, HMC is in the better half of the industry, outperforming 78.38% of the companies in the same industry.
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 6.42%.
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
With an excellent Profit Margin value of 3.85%, HMC belongs to the best of the industry, outperforming 86.49% of the companies in the same industry.
In the last couple of years the Profit Margin of HMC has grown nicely.
HMC's Operating Margin of 5.59% is amongst the best of the industry. HMC outperforms 83.78% of its industry peers.
In the last couple of years the Operating Margin of HMC has grown nicely.
With an excellent Gross Margin value of 21.50%, HMC belongs to the best of the industry, outperforming 86.49% of the companies in the same industry.
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.
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
HMC has an Altman-Z score of 1.67. 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 1.67, HMC is doing good in the industry, outperforming 75.68% of the companies in the same industry.
HMC has a Debt/Equity ratio of 0.56. This is a neutral value indicating HMC is somewhat dependend on debt financing.
HMC's Debt to Equity ratio of 0.56 is fine compared to the rest of the industry. HMC outperforms 62.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.67 |
ROIC/WACC1.33
WACC2.89%
2.3 Liquidity
A Current Ratio of 1.36 indicates that HMC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.36, HMC is in the better half of the industry, outperforming 62.16% of the companies in the same industry.
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.
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
The earnings per share for HMC have decreased strongly by -20.79% in the last year.
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 6.17% in the last year.
HMC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.75% yearly.
EPS 1Y (TTM)-20.79%
EPS 3Y-20.96%
EPS 5Y-7.21%
EPS Q2Q%-81.18%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.28%
3.2 Future
Based on estimates for the next years, HMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.93% on average per year.
The Revenue is expected to grow by 1.72% on average over the next years.
EPS Next Y25.54%
EPS Next 2Y17.93%
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
HMC is valuated cheaply with a Price/Earnings ratio of 7.93.
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.
HMC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.25.
A Price/Forward Earnings ratio of 6.32 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.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.80, HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.93 | ||
| Fwd PE | 6.32 |
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 | 6.62 |
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.
HMC's earnings are expected to grow with 17.93% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.31
PEG (5Y)N/A
EPS Next 2Y17.93%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.24%, HMC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.78, HMC pays a better dividend. On top of this HMC pays more dividend than 91.89% 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 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.24% |
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 2Y17.93%
EPS Next 3YN/A
31.24
-0.61 (-1.92%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners41.07%
Inst Owner Change-0.13%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap42.60B
Analysts75.2
Price Target32.09 (2.72%)
Short Float %0.49%
Short Ratio6.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.24% |
Yearly Dividend1.68
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)-27.29%
Min EPS beat(2)-73.88%
Max EPS beat(2)19.29%
EPS beat(4)2
Avg EPS beat(4)-28.04%
Min EPS beat(4)-73.88%
Max EPS beat(4)19.29%
EPS beat(8)5
Avg EPS beat(8)2.72%
EPS beat(12)6
Avg EPS beat(12)-0.74%
EPS beat(16)10
Avg EPS beat(16)10.16%
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)0.69%
PT rev (3m)-0.72%
EPS NQ rev (1m)10.86%
EPS NQ rev (3m)-1.35%
EPS NY rev (1m)1.45%
EPS NY rev (3m)1.57%
Revenue NQ rev (1m)0.25%
Revenue NQ rev (3m)-1.2%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.93 | ||
| Fwd PE | 6.32 | ||
| P/S | 0.29 | ||
| P/FCF | N/A | ||
| P/OCF | 21.63 | ||
| P/B | 0.51 | ||
| P/tB | 0.56 | ||
| EV/EBITDA | 6.62 |
EPS(TTM)3.94
EY12.61%
EPS(NY)4.94
Fwd EY15.82%
FCF(TTM)-2.75
FCFYN/A
OCF(TTM)1.44
OCFY4.62%
SpS107.24
BVpS60.95
TBVpS55.38
PEG (NY)0.31
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 | 1.67 |
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)-20.79%
EPS 3Y-20.96%
EPS 5Y-7.21%
EPS Q2Q%-81.18%
EPS Next Y25.54%
EPS Next 2Y17.93%
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 Year24143.9%
EBIT Next 3Y542.52%
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%