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 39 industry peers in the Automobiles industry. HMC has an excellent profitability rating, but there are concerns on its financial health. HMC is cheap, but on the other hand it scores bad on growth.
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.
In the past 5 years HMC has always been profitable.
In the past 5 years HMC always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.72%, HMC belongs to the top of the industry, outperforming 82.05% 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 79.49% of the companies in the same industry.
With a decent Return On Invested Capital value of 3.85%, HMC is doing good in the industry, outperforming 79.49% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HMC is below the industry average of 6.56%.
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
HMC's Profit Margin of 3.85% is amongst the best of the industry. HMC outperforms 84.62% of its industry peers.
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 84.62% 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 82.05% of its industry peers.
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
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
The debt/assets ratio for HMC is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.66, we must say that HMC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of HMC (1.66) is better than 76.92% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that 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 | 1.66 |
ROIC/WACC0.59
WACC6.51%
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.
With a decent Current ratio value of 1.36, HMC is doing good in the industry, outperforming 61.54% 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.
HMC's Quick ratio of 1.07 is fine compared to the rest of the industry. HMC outperforms 69.23% 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.
The Revenue has been growing slightly by 7.75% on average over the past years.
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.
Based on estimates for the next years, HMC will show a small growth in Revenue. The Revenue will grow by 1.72% on average per year.
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
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
The Price/Earnings ratio is 7.87, which indicates a rather cheap valuation of HMC.
Based on the Price/Earnings ratio, HMC is valued cheaper than 89.74% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.25, HMC is valued rather cheaply.
A Price/Forward Earnings ratio of 6.18 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 92.31% of the companies in the same industry.
HMC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.87 | ||
| Fwd PE | 6.18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaper than 92.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.48 |
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.
The excellent profitability rating of HMC may justify a higher PE ratio.
HMC's earnings are expected to grow with 18.72% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.29
PEG (5Y)N/A
EPS Next 2Y18.72%
EPS Next 3YN/A
5. Dividend
5.1 Amount
HMC has a Yearly Dividend Yield of 4.68%, which is a nice return.
HMC's Dividend Yield is rather good when compared to the industry average which is at 3.64. HMC pays more dividend than 94.87% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.68% |
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
HMC pays out 41.61% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP41.61%
EPS Next 2Y18.72%
EPS Next 3YN/A
30.52
-0.02 (-0.07%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners43.86%
Inst Owner Change0.01%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap43.01B
Analysts77.6
Price Target35.78 (17.23%)
Short Float %0.5%
Short Ratio5.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.68% |
Yearly Dividend1.67
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)10.7%
PT rev (3m)15.26%
EPS NQ rev (1m)-12.64%
EPS NQ rev (3m)-9.95%
EPS NY rev (1m)-1.72%
EPS NY rev (3m)0.69%
Revenue NQ rev (1m)-1.44%
Revenue NQ rev (3m)-1.35%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.87 | ||
| Fwd PE | 6.18 | ||
| P/S | 0.28 | ||
| P/FCF | N/A | ||
| P/OCF | 21.16 | ||
| P/B | 0.5 | ||
| P/tB | 0.55 | ||
| EV/EBITDA | 6.48 |
EPS(TTM)3.88
EY12.71%
EPS(NY)4.94
Fwd EY16.17%
FCF(TTM)-2.74
FCFYN/A
OCF(TTM)1.44
OCFY4.73%
SpS107.1
BVpS60.87
TBVpS55.31
PEG (NY)0.29
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 | 1.66 |
F-Score4
WACC6.51%
ROIC/WACC0.59
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 Year23392.6%
EBIT Next 3Y535.81%
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%