HONDA MOTOR CO LTD-SPONS ADR (HMC)

US4381283088 - ADR

32.59  +0.41 (+1.27%)

After market: 32.59 0 (0%)

Fundamental Rating

5

Overall HMC gets a fundamental rating of 5 out of 10. We evaluated HMC against 39 industry peers in the Automobiles industry. While HMC belongs to the best of the industry regarding profitability, there are concerns on its financial health. HMC is valued quite cheap, while showing a decent growth score. This is a good combination!



7

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.
In the past 5 years HMC has always been profitable.
HMC had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

HMC has a better Return On Assets (3.72%) than 76.92% of its industry peers.
HMC has a better Return On Equity (8.72%) than 74.36% of its industry peers.
With a decent Return On Invested Capital value of 4.62%, HMC is doing good in the industry, outperforming 71.79% 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 11.79%.
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 RankSector 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

Looking at the Profit Margin, with a value of 5.42%, HMC is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
HMC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 6.76%, HMC belongs to the top of the industry, outperforming 82.05% of the companies in the same industry.
HMC's Operating Margin has improved in the last couple of years.
HMC has a better Gross Margin (21.60%) than 79.49% 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 RankSector 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%

3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HMC is destroying value.
The number of shares outstanding for HMC has been reduced compared to 1 year ago.
The number of shares outstanding for HMC has been increased compared to 5 years ago.
HMC has a worse debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 1.77, we must say that HMC is in the distress zone and has some risk of bankruptcy.
HMC's Altman-Z score of 1.77 is fine compared to the rest of the industry. HMC outperforms 74.36% of its industry peers.
The Debt to FCF ratio of HMC is 73.32, which is on the high side as it means it would take HMC, 73.32 years of fcf income to pay off 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 76.92% of the companies in the same industry.
HMC has a Debt/Equity ratio of 0.60. This is a neutral value indicating HMC is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.60, HMC is not doing good in the industry: 64.10% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 0.6
Debt/FCF 73.32
Altman-Z 1.77
ROIC/WACC0.63
WACC7.38%

2.3 Liquidity

A Current Ratio of 1.43 indicates that HMC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.43, HMC perfoms like the industry average, outperforming 48.72% 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.
The Quick ratio of HMC (1.13) is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 1.43
Quick Ratio 1.13

5

3. Growth

3.1 Past

HMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 65.33%, which is quite impressive.
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%.
HMC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.16% yearly.
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

The Earnings Per Share is expected to grow by 4.35% on average over the next years.
The Revenue is expected to grow by 2.61% on average over the next years.
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

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.

8

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 7.60, the valuation of HMC can be described as very cheap.
HMC's Price/Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 92.31% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.15, HMC is valued rather cheaply.
A Price/Forward Earnings ratio of 7.64 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 87.18% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.65. HMC is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 7.6
Fwd PE 7.64

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaply inside the industry as 97.44% of the companies are valued more expensively.
HMC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HMC is cheaper than 84.62% of the companies in the same industry.
Industry RankSector Rank
P/FCF 59.99
EV/EBITDA 5.31

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

5. Dividend

5.1 Amount

HMC has a Yearly Dividend Yield of 3.95%.
HMC's Dividend Yield is rather good when compared to the industry average which is at 3.00. HMC pays more dividend than 94.87% of the companies in the same industry.
HMC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
Industry RankSector Rank
Dividend Yield 3.95%

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

HMC pays out 21.85% of its income as dividend. This is a sustainable payout ratio.
DP21.85%
EPS Next 2Y2.62%
EPS Next 3Y4.35%

HONDA MOTOR CO LTD-SPONS ADR

NYSE:HMC (7/12/2024, 7:04:00 PM)

After market: 32.59 0 (0%)

32.59

+0.41 (+1.27%)

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 Cap52.38B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 3.95%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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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 RankSector Rank
PE 7.6
Fwd PE 7.64
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 RankSector 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 RankSector 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