HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
USA - NYSE:HMC - US4381283088 - ADR
33.355 USD
-0.43 (-1.26%)
Taking everything into account, HMC scores 5 out of 10 in our fundamental rating. HMC was compared to 37 industry peers in the Automobiles industry. HMC scores excellent on profitability, but there are some minor concerns on its financial health. HMC is valued correctly, but it does not seem to be growing.
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.
HMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
HMC has a Return On Assets of 2.14%. This is amongst the best in the industry. HMC outperforms 83.78% of its industry peers.
Looking at the Return On Equity, with a value of 5.41%, HMC belongs to the top of the industry, outperforming 81.08% of the companies in the same industry.
HMC has a better Return On Invested Capital (3.18%) than 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 5.63%.
| 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
HMC has a Profit Margin of 2.95%. This is amongst the best in the industry. HMC outperforms 83.78% of its industry peers.
In the last couple of years the Profit Margin of HMC has grown nicely.
The Operating Margin of HMC (4.50%) is better than 86.49% of its industry peers.
In the last couple of years the Operating Margin of HMC has grown nicely.
Looking at the Gross Margin, with a value of 20.99%, HMC belongs to the top of the industry, outperforming 83.78% 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 | 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.
HMC has less shares outstanding than it did 1 year ago.
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 1.67. This is a bad value and indicates that HMC is not financially healthy and even has some risk of bankruptcy.
HMC has a Altman-Z score of 1.67. This is in the better half of the industry: HMC outperforms 75.68% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that HMC is somewhat dependend on debt financing.
The Debt to Equity ratio of HMC (0.59) is better than 62.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.67 |
ROIC/WACC1.1
WACC2.9%
2.3 Liquidity
HMC has a Current Ratio of 1.30. 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 (1.30) is better than 62.16% of its industry peers.
A Quick Ratio of 1.01 indicates that HMC should not have too much problems paying its short term obligations.
The Quick ratio of HMC (1.01) is better than 67.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
The earnings per share for HMC have decreased strongly by -38.67% in the last year.
Measured over the past years, HMC shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.21% on average per year.
The Revenue has been growing slightly by 1.96% in the past year.
The Revenue has been growing slightly by 7.75% on average over the past years.
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
HMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.04% yearly.
Based on estimates for the next years, HMC will show a small growth in Revenue. The Revenue will grow by 0.91% on average per year.
EPS Next Y-18.8%
EPS Next 2Y2.99%
EPS Next 3Y6.04%
EPS Next 5YN/A
Revenue Next Year-1.67%
Revenue Next 2Y-0.08%
Revenue Next 3Y0.91%
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
With a Price/Earnings ratio of 10.83, the valuation of HMC can be described as very reasonable.
HMC's Price/Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 91.89% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.41. HMC is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 8.21, which indicates a very decent valuation of HMC.
Based on the Price/Forward Earnings ratio, HMC is valued cheaply inside the industry as 89.19% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.88. HMC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.83 | ||
| Fwd PE | 8.21 |
4.2 Price Multiples
89.19% of the companies in the same industry are more expensive than HMC, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.12 |
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 2Y2.99%
EPS Next 3Y6.04%
5. Dividend
5.1 Amount
HMC has a Yearly Dividend Yield of 2.96%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.27, HMC pays a better dividend. On top of this HMC pays more dividend than 89.19% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, HMC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
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 2Y2.99%
EPS Next 3Y6.04%
NYSE:HMC (9/19/2025, 3:00:56 PM)
33.355
-0.43 (-1.26%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners41.07%
Inst Owner Change-28.87%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap44.39B
Analysts74.4
Price Target34.66 (3.91%)
Short Float %0.45%
Short Ratio4.58
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
Yearly Dividend1.62
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)-1.8%
EPS NQ rev (1m)7.13%
EPS NQ rev (3m)-10.88%
EPS NY rev (1m)-37.41%
EPS NY rev (3m)-36.5%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-3.21%
Revenue NY rev (1m)0.98%
Revenue NY rev (3m)-2.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.83 | ||
| Fwd PE | 8.21 | ||
| P/S | 0.3 | ||
| P/FCF | N/A | ||
| P/OCF | 14.26 | ||
| P/B | 0.55 | ||
| P/tB | 0.61 | ||
| EV/EBITDA | 8.12 |
EPS(TTM)3.08
EY9.23%
EPS(NY)4.06
Fwd EY12.19%
FCF(TTM)-1.94
FCFYN/A
OCF(TTM)2.34
OCFY7.01%
SpS110.21
BVpS60.12
TBVpS54.72
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 | 1.67 |
F-Score4
WACC2.9%
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-18.8%
EPS Next 2Y2.99%
EPS Next 3Y6.04%
EPS Next 5YN/A
Revenue 1Y (TTM)1.96%
Revenue growth 3Y14.23%
Revenue growth 5Y7.75%
Sales Q2Q%-1.2%
Revenue Next Year-1.67%
Revenue Next 2Y-0.08%
Revenue Next 3Y0.91%
Revenue Next 5YN/A
EBIT growth 1Y-33.91%
EBIT growth 3Y11.68%
EBIT growth 5Y13.88%
EBIT Next Year24000.7%
EBIT Next 3Y541.25%
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%