HONDA MOTOR CO LTD-SPONS ADR (HMC)
US4381283088 - ADR
HMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 41 industry peers in the Automobiles industry. While HMC belongs to the best of the industry regarding profitability, there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on HMC.
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.
HMC had positive earnings in each of the past 5 years.
In the past 5 years HMC always reported a positive cash flow from operatings.
1.2 Ratios
HMC has a better Return On Assets (3.72%) than 75.61% of its industry peers.
Looking at the Return On Equity, with a value of 8.72%, HMC is in the better half of the industry, outperforming 73.17% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.62%, HMC is in the better half of the industry, outperforming 70.73% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HMC is significantly below the industry average of 11.59%.
The last Return On Invested Capital (4.62%) for HMC is above the 3 year average (3.75%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.72% | ||
| ROE | 8.72% | ||
| ROIC | 4.62% |
ROA(3y)3.1%
ROA(5y)2.91%
ROE(3y)7.1%
ROE(5y)6.84%
ROIC(3y)3.75%
ROIC(5y)3.43%
1.3 Margins
HMC has a better Profit Margin (5.42%) than 75.61% of its industry peers.
HMC's Profit Margin has improved in the last couple of years.
The Operating Margin of HMC (6.76%) is better than 80.49% of its industry peers.
HMC's Operating Margin has improved in the last couple of years.
The Gross Margin of HMC (21.60%) is better than 78.05% 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 | 6.76% | ||
| PM (TTM) | 5.42% | ||
| GM | 21.6% |
OM growth 3Y10.51%
OM growth 5Y8.15%
PM growth 3Y2.78%
PM growth 5Y7.13%
GM growth 3Y1.37%
GM growth 5Y0.74%
2. Health
2.1 Basic Checks
HMC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for HMC has been reduced compared to 1 year ago.
Compared to 5 years ago, HMC has more shares outstanding
Compared to 1 year ago, HMC has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.75, we must say that HMC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of HMC (1.75) is better than 73.17% of its industry peers.
HMC has a debt to FCF ratio of 73.32. This is a negative value and a sign of low solvency as HMC would need 73.32 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 73.32, HMC is in the better half of the industry, outperforming 78.05% of the companies in the same industry.
A Debt/Equity ratio of 0.60 indicates that HMC is somewhat dependend on debt financing.
HMC's Debt to Equity ratio of 0.60 is on the low side compared to the rest of the industry. HMC is outperformed by 63.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 73.32 | ||
| Altman-Z | 1.75 |
ROIC/WACC0.64
WACC7.2%
2.3 Liquidity
HMC has a Current Ratio of 1.43. This is a normal value and indicates that HMC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.43, HMC is in line with its industry, outperforming 51.22% of the companies in the same industry.
HMC has a Quick Ratio of 1.13. 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 Quick ratio (1.13) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 65.33% over the past year.
HMC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.17% yearly.
HMC shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.83%.
Measured over the past years, HMC shows a small growth in Revenue. The Revenue has been growing by 5.16% on average per year.
EPS 1Y (TTM)65.33%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%118.25%
Revenue 1Y (TTM)20.83%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%23.84%
3.2 Future
HMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.35% yearly.
HMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.61% yearly.
EPS Next Y-0.61%
EPS Next 2Y2.62%
EPS Next 3Y4.35%
EPS Next 5YN/A
Revenue Next Year4.25%
Revenue Next 2Y3.22%
Revenue Next 3Y2.61%
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.
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
Based on the Price/Earnings ratio of 7.01, the valuation of HMC can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 92.68% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of HMC to the average of the S&P500 Index (24.41), we can say HMC is valued rather cheaply.
The Price/Forward Earnings ratio is 7.05, which indicates a rather cheap valuation of HMC.
90.24% of the companies in the same industry are more expensive than HMC, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of HMC to the average of the S&P500 Index (20.59), we can say HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.01 | ||
| Fwd PE | 7.05 |
4.2 Price Multiples
95.12% of the companies in the same industry are more expensive than HMC, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, HMC is valued cheaper than 85.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.36 | ||
| EV/EBITDA | 4.97 |
4.3 Compensation for Growth
HMC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.62%
EPS Next 3Y4.35%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.08%, HMC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.01, HMC pays a better dividend. On top of this HMC pays more dividend than 95.12% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.08% |
5.2 History
The dividend of HMC decreases each year by -14.82%.
HMC has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-14.82%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
21.85% of the earnings are spent on dividend by HMC. This is a low number and sustainable payout ratio.
DP21.85%
EPS Next 2Y2.62%
EPS Next 3Y4.35%
HONDA MOTOR CO LTD-SPONS ADR
NYSE:HMC (7/26/2024, 7:04:00 PM)
After market: 31.28 0 (0%)31.28
+0.41 (+1.33%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap50.28B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.08% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(8)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
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Revenue beat(12)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.01 | ||
| Fwd PE | 7.05 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.72% | ||
| ROE | 8.72% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.76% | ||
| PM (TTM) | 5.42% | ||
| GM | 21.6% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)65.33%
EPS 3Y-15.97%
EPS 5Y
EPS Q2Q%
EPS Next Y-0.61%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)20.83%
Revenue growth 3Y15.76%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y