HONDA MOTOR CO LTD-SPONS ADR (HMC)
US4381283088 - ADR
Overall HMC gets a fundamental rating of 6 out of 10. We evaluated HMC against 39 industry peers in the Automobiles industry. HMC has an average financial health and profitability rating. HMC scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make HMC suitable for value investing!
1. Profitability
1.1 Basic Checks
In the past year HMC was profitable.
HMC had a positive operating cash flow in the past year.
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's Return On Assets of 3.42% is fine compared to the rest of the industry. HMC outperforms 73.68% of its industry peers.
The Return On Equity of HMC (7.78%) is better than 73.68% of its industry peers.
HMC's Return On Invested Capital of 4.28% is fine compared to the rest of the industry. HMC outperforms 73.68% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HMC is significantly below the industry average of 9.76%.
The 3 year average ROIC (3.16%) for HMC is below the current ROIC(4.28%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.42% | ||
| ROE | 7.78% | ||
| ROIC | 4.28% |
ROA(3y)2.86%
ROA(5y)2.76%
ROE(3y)6.6%
ROE(5y)6.58%
ROIC(3y)3.16%
ROIC(5y)3.19%
1.3 Margins
HMC's Profit Margin of 4.84% is fine compared to the rest of the industry. HMC outperforms 78.95% of its industry peers.
In the last couple of years the Profit Margin of HMC has declined.
HMC has a Operating Margin of 5.79%. This is in the better half of the industry: HMC outperforms 76.32% of its industry peers.
In the last couple of years the Operating Margin of HMC has declined.
The Gross Margin of HMC (21.23%) is better than 81.58% of its industry peers.
In the last couple of years the Gross Margin of HMC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.79% | ||
| PM (TTM) | 4.84% | ||
| GM | 21.23% |
OM growth 3Y2.86%
OM growth 5Y-3.18%
PM growth 3Y8.07%
PM growth 5Y-10.99%
GM growth 3Y-1.51%
GM growth 5Y-2.07%
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.
HMC has less shares outstanding than it did 1 year ago.
HMC has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, HMC has an improved debt to assets ratio.
2.2 Solvency
HMC has an Altman-Z score of 1.86. This is not the best score and indicates that HMC is in the grey zone with still only limited risk for bankruptcy at the moment.
HMC has a Altman-Z score of 1.86. This is in the better half of the industry: HMC outperforms 68.42% of its industry peers.
HMC has a debt to FCF ratio of 28.64. This is a negative value and a sign of low solvency as HMC would need 28.64 years to pay back of all of its debts.
The Debt to FCF ratio of HMC (28.64) is better than 81.58% of its industry peers.
HMC has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
HMC has a Debt to Equity ratio (0.45) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 28.64 | ||
| Altman-Z | 1.86 |
ROIC/WACC0.6
WACC7.15%
2.3 Liquidity
HMC has a Current Ratio of 1.45. 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 Current ratio (1.45) which is comparable to the rest of the industry.
A Quick Ratio of 1.13 indicates that HMC should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.13, HMC perfoms like the industry average, outperforming 52.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.45 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 43.86% over the past year.
The earnings per share for HMC have been decreasing by -25.39% on average. This is quite bad
HMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 18.20%.
The Revenue has been growing slightly by 1.94% on average over the past years.
EPS 1Y (TTM)43.86%
EPS 3Y-19.32%
EPS 5Y-25.39%
EPS growth Q2Q8.42%
Revenue 1Y (TTM)18.2%
Revenue growth 3Y4.23%
Revenue growth 5Y1.94%
Revenue growth Q2Q21.45%
3.2 Future
Based on estimates for the next years, HMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.12% on average per year.
The Revenue is expected to grow by 8.04% on average over the next years. This is quite good.
EPS Next Y52.91%
EPS Next 2Y26.86%
EPS Next 3Y19.12%
EPS Next 5YN/A
Revenue Next Year18.5%
Revenue Next 2Y10.74%
Revenue Next 3Y8.04%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
HMC is valuated reasonably with a Price/Earnings ratio of 8.78.
Based on the Price/Earnings ratio, HMC is valued cheaply inside the industry as 86.84% of the companies are valued more expensively.
HMC is valuated cheaply when we compare the Price/Earnings ratio to 24.76, which is the current average of the S&P500 Index.
HMC is valuated cheaply with a Price/Forward Earnings ratio of 7.96.
Based on the Price/Forward Earnings ratio, HMC is valued cheaply inside the industry as 92.11% of the companies are valued more expensively.
HMC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.78 | ||
| Fwd PE | 7.96 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 94.74% of the companies listed in the same industry.
86.84% of the companies in the same industry are more expensive than HMC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.6 | ||
| EV/EBITDA | 6.88 |
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 decent profitability rating of HMC may justify a higher PE ratio.
A more expensive valuation may be justified as HMC's earnings are expected to grow with 19.12% in the coming years.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y26.86%
EPS Next 3Y19.12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.19%, HMC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.75, HMC pays a better dividend. On top of this HMC pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.19% |
5.2 History
The dividend of HMC decreases each year by -15.40%.
HMC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-15.4%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
25.79% of the earnings are spent on dividend by HMC. This is a low number and sustainable payout ratio.
DP25.79%
EPS Next 2Y26.86%
EPS Next 3Y19.12%
HONDA MOTOR CO LTD-SPONS ADR
NYSE:HMC (4/19/2024, 7:04:00 PM)
After market: 34.14 0 (0%)34.14
-0.31 (-0.9%)
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 Cap55.19B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.19% |
Dividend Growth(5Y)
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Surprises & Revisions
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.78 | ||
| Fwd PE | 7.96 | ||
| 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)0.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.42% | ||
| ROE | 7.78% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 5.79% | ||
| PM (TTM) | 4.84% | ||
| GM | 21.23% | ||
| 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 Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.45 | ||
| 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)
Growth
EPS 1Y (TTM)43.86%
EPS 3Y-19.32%
EPS 5Y
EPS growth Q2Q
EPS Next Y52.91%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)18.2%
Revenue growth 3Y4.23%
Revenue growth 5Y
Revenue growth 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
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OCF growth 5Y