HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
NYSE:HMC - New York Stock Exchange, Inc. - US4381283088 - ADR - Currency: USD
Taking everything into account, HMC scores 5 out of 10 in our fundamental rating. HMC was compared to 41 industry peers in the Automobiles industry. HMC has an excellent profitability rating, but there are concerns on its financial health. HMC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year HMC was profitable.
In the past year HMC had a positive cash flow from operations.
Each year in the past 5 years HMC has been profitable.
Each year in the past 5 years HMC had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.32%, HMC belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
HMC's Return On Equity of 7.98% is fine compared to the rest of the industry. HMC outperforms 78.05% of its industry peers.
With an excellent Return On Invested Capital value of 4.92%, HMC belongs to the best of the industry, outperforming 82.93% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HMC is significantly below the industry average of 9.04%.
The last Return On Invested Capital (4.92%) for HMC is above the 3 year average (3.75%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 7.98% | ||
| ROIC | 4.92% |
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 4.79%, HMC belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
HMC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 6.64%, HMC belongs to the best of the industry, outperforming 85.37% of the companies in the same industry.
In the last couple of years the Operating Margin of HMC has grown nicely.
HMC's Gross Margin of 21.49% is amongst the best of the industry. HMC outperforms 82.93% of its industry peers.
HMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.64% | ||
| PM (TTM) | 4.79% | ||
| GM | 21.49% |
OM growth 3Y10.51%
OM growth 5Y8.15%
PM growth 3Y2.78%
PM growth 5Y7.13%
GM growth 3Y1.37%
GM growth 5Y0.74%
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.
Compared to 1 year ago, HMC has less shares outstanding
HMC has more shares outstanding than it did 5 years ago.
HMC has a worse debt/assets ratio than last year.
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 has a Altman-Z score of 1.67. This is amongst the best in the industry. HMC outperforms 82.93% of its industry peers.
A Debt/Equity ratio of 0.52 indicates that HMC is somewhat dependend on debt financing.
HMC's Debt to Equity ratio of 0.52 is in line compared to the rest of the industry. HMC outperforms 53.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.67 |
ROIC/WACC0.72
WACC6.79%
2.3 Liquidity
HMC has a Current Ratio of 1.38. This is a normal value and indicates that HMC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.38, HMC is in line with its industry, outperforming 58.54% of the companies in the same industry.
HMC has a Quick Ratio of 1.10. 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 better Quick ratio (1.10) than 65.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
HMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.79%, which is quite good.
The Earnings Per Share has been decreasing by -8.17% on average over the past years.
The Revenue has grown by 12.25% in the past year. This is quite good.
The Revenue has been growing slightly by 5.16% on average over the past years.
EPS 1Y (TTM)9.79%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%27.4%
Revenue 1Y (TTM)12.25%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%2.62%
3.2 Future
The Earnings Per Share is expected to grow by 2.89% on average over the next years.
Based on estimates for the next years, HMC will show a small growth in Revenue. The Revenue will grow by 3.45% on average per year.
EPS Next Y-5.36%
EPS Next 2Y0.38%
EPS Next 3Y2.89%
EPS Next 5YN/A
Revenue Next Year5.66%
Revenue Next 2Y3.7%
Revenue Next 3Y3.45%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 6.16 indicates a rather cheap valuation of HMC.
Compared to the rest of the industry, the Price/Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 92.68% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. HMC is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 5.91 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 92.68% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of HMC to the average of the S&P500 Index (21.08), we can say HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.16 | ||
| Fwd PE | 5.91 |
4.2 Price Multiples
92.68% of the companies in the same industry are more expensive than HMC, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.65 |
4.3 Compensation for Growth
The excellent profitability rating of HMC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y0.38%
EPS Next 3Y2.89%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.04%, HMC is a good candidate for dividend investing.
HMC's Dividend Yield is rather good when compared to the industry average which is at 5.23. HMC pays more dividend than 95.12% of the companies in the same industry.
HMC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.04% |
5.2 History
The dividend of HMC decreases each year by -14.82%.
HMC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-14.82%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
HMC pays out 33.35% of its income as dividend. This is a sustainable payout ratio.
DP33.35%
EPS Next 2Y0.38%
EPS Next 3Y2.89%
29.12
+0.66 (+2.32%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners43.86%
Inst Owner Change0.02%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap43.94B
Analysts78.33
Price Target35.58 (22.18%)
Short Float %0.38%
Short Ratio3.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.04% |
Yearly Dividend1.06
Dividend Growth(5Y)-14.82%
DP33.35%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-24.5%
Min EPS beat(2)-68.3%
Max EPS beat(2)19.29%
EPS beat(4)3
Avg EPS beat(4)14%
Min EPS beat(4)-68.3%
Max EPS beat(4)94.25%
EPS beat(8)5
Avg EPS beat(8)8.81%
EPS beat(12)7
Avg EPS beat(12)7.31%
EPS beat(16)11
Avg EPS beat(16)25.31%
Revenue beat(2)2
Avg Revenue beat(2)1.09%
Min Revenue beat(2)0.36%
Max Revenue beat(2)1.81%
Revenue beat(4)3
Avg Revenue beat(4)0.37%
Min Revenue beat(4)-2.16%
Max Revenue beat(4)1.81%
Revenue beat(8)4
Avg Revenue beat(8)-0.28%
Revenue beat(12)6
Avg Revenue beat(12)0.12%
Revenue beat(16)9
Avg Revenue beat(16)0.44%
PT rev (1m)-0.08%
PT rev (3m)27.56%
EPS NQ rev (1m)-3.24%
EPS NQ rev (3m)21.6%
EPS NY rev (1m)-1.81%
EPS NY rev (3m)-6.13%
Revenue NQ rev (1m)-0.6%
Revenue NQ rev (3m)-0.25%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.16 | ||
| Fwd PE | 5.91 | ||
| P/S | 0.29 | ||
| P/FCF | N/A | ||
| P/OCF | 13.08 | ||
| P/B | 0.48 | ||
| P/tB | 0.52 | ||
| EV/EBITDA | 5.65 |
EPS(TTM)4.73
EY16.24%
EPS(NY)4.92
Fwd EY16.91%
FCF(TTM)-1.37
FCFYN/A
OCF(TTM)2.23
OCFY7.64%
SpS101.13
BVpS60.74
TBVpS55.81
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 7.98% | ||
| ROCE | 6.41% | ||
| ROIC | 4.92% | ||
| ROICexc | 6.4% | ||
| ROICexgc | 6.82% | ||
| OM | 6.64% | ||
| PM (TTM) | 4.79% | ||
| GM | 21.49% | ||
| FCFM | N/A |
ROA(3y)3.1%
ROA(5y)2.91%
ROE(3y)7.1%
ROE(5y)6.84%
ROIC(3y)3.75%
ROIC(5y)3.43%
ROICexc(3y)4.78%
ROICexc(5y)4.31%
ROICexgc(3y)16.09%
ROICexgc(5y)16.15%
ROCE(3y)5.21%
ROCE(5y)4.8%
ROICexcg growth 3Y-39.49%
ROICexcg growth 5Y7.24%
ROICexc growth 3Y19.37%
ROICexc growth 5Y7.24%
OM growth 3Y10.51%
OM growth 5Y8.15%
PM growth 3Y2.78%
PM growth 5Y7.13%
GM growth 3Y1.37%
GM growth 5Y0.74%
F-Score4
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.1 | ||
| Cap/Depr | 104.77% | ||
| Cap/Sales | 3.56% | ||
| Interest Coverage | 3.49 | ||
| Cash Conversion | 21.92% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 1.67 |
F-Score4
WACC6.79%
ROIC/WACC0.72
Cap/Depr(3y)79.26%
Cap/Depr(5y)82.4%
Cap/Sales(3y)3.27%
Cap/Sales(5y)3.6%
Profit Quality(3y)138.76%
Profit Quality(5y)115.71%
High Growth Momentum
Growth
EPS 1Y (TTM)9.79%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%27.4%
EPS Next Y-5.36%
EPS Next 2Y0.38%
EPS Next 3Y2.89%
EPS Next 5YN/A
Revenue 1Y (TTM)12.25%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%2.62%
Revenue Next Year5.66%
Revenue Next 2Y3.7%
Revenue Next 3Y3.45%
Revenue Next 5YN/A
EBIT growth 1Y28.69%
EBIT growth 3Y27.92%
EBIT growth 5Y13.73%
EBIT Next Year21904.3%
EBIT Next 3Y511.13%
EBIT Next 5YN/A
FCF growth 1Y-116.29%
FCF growth 3Y-35.69%
FCF growth 5Y-3.79%
OCF growth 1Y-80.41%
OCF growth 3Y-11.34%
OCF growth 5Y-0.75%