Don't overlook NYSE:HMC—it's a hidden gem with strong fundamentals and an attractive price tag.

Last update: Feb 7, 2024

Our stock screener has singled out HONDA MOTOR CO LTD-SPONS ADR (NYSE:HMC) as a stellar value proposition. NYSE:HMC not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Valuation Insights: NYSE:HMC

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:HMC scores a 9 out of 10:

Based on the Price/Earnings ratio of 8.61, the valuation of HMC can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 87.18% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 25.74. HMC is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 7.77, the valuation of HMC can be described as very cheap.
Based on the Price/Forward Earnings ratio, HMC is valued cheaper than 87.18% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.37, HMC is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaper than 94.87% of the companies in the same industry.
84.62% of the companies in the same industry are more expensive than HMC, based on the Price/Free Cash Flow ratio.
The 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.
HMC's earnings are expected to grow with 17.51% in the coming years. This may justify a more expensive valuation.

Profitability Examination for NYSE:HMC

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:HMC scores a 7 out of 10:

With a decent Return On Assets value of 3.36%, HMC is doing good in the industry, outperforming 79.49% of the companies in the same industry.
HMC has a better Return On Equity (7.52%) than 79.49% of its industry peers.
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.
The last Return On Invested Capital (3.85%) for HMC is above the 3 year average (3.16%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 5.04%, HMC belongs to the top of the industry, outperforming 82.05% of the companies in the same industry.
HMC has a Operating Margin of 5.56%. This is amongst the best in the industry. HMC outperforms 82.05% of its industry peers.
HMC has a Gross Margin of 20.83%. This is amongst the best in the industry. HMC outperforms 87.18% of its industry peers.

Understanding NYSE:HMC's Health

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:HMC scores a 5 out of 10:

With a decent Altman-Z score value of 1.79, HMC is doing good in the industry, outperforming 76.92% of the companies in the same industry.
With an excellent Debt to FCF ratio value of 14.48, HMC belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
HMC has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.

Assessing Growth Metrics for NYSE:HMC

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:HMC has earned a 6 for growth:

HMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.78%.
Based on estimates for the next years, HMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.51% on average per year.
The Revenue is expected to grow by 477.12% on average over the next years. This is a very strong growth
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 accelerating: in the next years the growth will be better than in the last years.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of HMC for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.