HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
USA - NYSE:HMC - US4381283088 - ADR
33.73 USD
+0.2 (+0.6%)
33.73 USD
0 (0%)
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 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
In the past year HMC was profitable.
HMC had a positive operating cash flow in the past year.
In the past 5 years HMC has always been profitable.
Each year in the past 5 years HMC had a positive operating cash flow.
1.2 Ratios
HMC has a better Return On Assets (2.14%) than 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.
The Return On Invested Capital of HMC (3.18%) is better than 83.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital 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
Looking at the Profit Margin, with a value of 2.95%, 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.
HMC has a Operating Margin of 4.50%. This is amongst the best in the industry. HMC outperforms 86.49% of its industry peers.
In the last couple of years the Operating Margin of HMC has grown nicely.
HMC has a better Gross Margin (20.99%) than 83.78% 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 | 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so HMC is still creating some value.
Compared to 1 year ago, HMC has less shares outstanding
HMC has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, HMC has a worse debt to assets ratio.
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's Altman-Z score of 1.67 is fine compared to the rest of the industry. HMC outperforms 78.38% of its industry peers.
HMC has a Debt/Equity ratio of 0.59. This is a neutral value indicating HMC is somewhat dependend on debt financing.
HMC has a better Debt to Equity ratio (0.59) 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
A Current Ratio of 1.30 indicates that HMC should not have too much problems paying its short term obligations.
HMC has a Current ratio of 1.30. This is in the better half of the industry: HMC outperforms 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.
HMC has a better Quick ratio (1.01) 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.
The Earnings Per Share has been decreasing by -7.21% on average over the past years.
The Revenue has been growing slightly by 1.96% 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)-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
Based on estimates for the next years, HMC will show a small growth in Earnings Per Share. The EPS will grow by 6.04% on average per year.
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
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.
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 10.95, which indicates a very decent valuation of HMC.
91.89% of the companies in the same industry are more expensive than HMC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.27, HMC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.29, the valuation of HMC can be described as reasonable.
86.49% of the companies in the same industry are more expensive than HMC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.77, HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.95 | ||
| Fwd PE | 8.29 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaper than 89.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.11 |
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
With a Yearly Dividend Yield of 2.96%, HMC has a reasonable but not impressive dividend return.
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
48.19% of the earnings are spent on dividend by HMC. This is a bit on the high side, but may be sustainable.
DP48.19%
EPS Next 2Y2.99%
EPS Next 3Y6.04%
33.73
+0.2 (+0.6%)
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 Cap44.89B
Analysts74.4
Price Target34.66 (2.76%)
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 | 10.95 | ||
| Fwd PE | 8.29 | ||
| P/S | 0.31 | ||
| P/FCF | N/A | ||
| P/OCF | 14.41 | ||
| P/B | 0.56 | ||
| P/tB | 0.62 | ||
| EV/EBITDA | 8.11 |
EPS(TTM)3.08
EY9.13%
EPS(NY)4.07
Fwd EY12.06%
FCF(TTM)-1.94
FCFYN/A
OCF(TTM)2.34
OCFY6.94%
SpS110.27
BVpS60.16
TBVpS54.75
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 Year23987.7%
EBIT Next 3Y541.14%
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%