HONDA MOTOR CO LTD-SPONS ADR (HMC) Stock Fundamental Analysis
NYSE:HMC - New York Stock Exchange, Inc. - US4381283088 - ADR
Taking everything into account, HMC scores 5 out of 10 in our fundamental rating. HMC was compared to 42 industry peers in the Automobiles industry. HMC scores excellent on profitability, but there are concerns on its financial health. HMC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
HMC had positive earnings in the past year.
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
With a decent Return On Assets value of 3.37%, HMC is doing good in the industry, outperforming 80.00% of the companies in the same industry.
HMC's Return On Equity of 7.95% is fine compared to the rest of the industry. HMC outperforms 75.00% of its industry peers.
With a decent Return On Invested Capital value of 5.17%, HMC is doing good in the industry, outperforming 80.00% 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 9.39%.
The 3 year average ROIC (3.75%) for HMC is below the current ROIC(5.17%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 7.95% | ||
| ROIC | 5.17% |
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
HMC's Profit Margin of 4.56% is fine compared to the rest of the industry. HMC outperforms 80.00% of its industry peers.
HMC's Profit Margin has improved in the last couple of years.
HMC has a better Operating Margin (6.61%) than 82.50% of its industry peers.
HMC's Operating Margin has improved in the last couple of years.
HMC has a better Gross Margin (21.61%) than 85.00% of its industry peers.
HMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.61% | ||
| PM (TTM) | 4.56% | ||
| GM | 21.61% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HMC is destroying 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
Based on the Altman-Z score of 1.81, we must say that HMC is in the distress zone and has some risk of bankruptcy.
HMC's Altman-Z score of 1.81 is fine compared to the rest of the industry. HMC outperforms 77.50% of its industry peers.
HMC has a Debt/Equity ratio of 0.50. This is a neutral value indicating HMC is somewhat dependend on debt financing.
HMC has a Debt to Equity ratio (0.50) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.81 |
ROIC/WACC0.75
WACC6.92%
2.3 Liquidity
HMC has a Current Ratio of 1.43. This is a normal value and indicates that HMC is financially healthy and should not expect problems in meeting its short term obligations.
HMC's Current ratio of 1.43 is in line compared to the rest of the industry. HMC outperforms 55.00% of its industry peers.
HMC has a Quick Ratio of 1.12. 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 Quick ratio (1.12) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.75% over the past year.
HMC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.17% yearly.
HMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.28%.
The Revenue has been growing slightly by 5.16% on average over the past years.
EPS 1Y (TTM)4.75%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%-58.46%
Revenue 1Y (TTM)17.28%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%8.19%
3.2 Future
HMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.21% yearly.
The Revenue is expected to grow by 2.95% on average over the next years.
EPS Next Y1.08%
EPS Next 2Y2.16%
EPS Next 3Y3.21%
EPS Next 5YN/A
Revenue Next Year5.53%
Revenue Next 2Y2.93%
Revenue Next 3Y2.95%
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 7.14 indicates a rather cheap valuation of HMC.
Based on the Price/Earnings ratio, HMC is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
HMC is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 6.19, the valuation of HMC can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 92.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.14 | ||
| Fwd PE | 6.19 |
4.2 Price Multiples
97.50% 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 | 5.42 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
HMC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.59
PEG (5Y)N/A
EPS Next 2Y2.16%
EPS Next 3Y3.21%
5. Dividend
5.1 Amount
HMC has a Yearly Dividend Yield of 4.67%, which is a nice return.
Compared to an average industry Dividend Yield of 3.90, HMC pays a better dividend. On top of this HMC pays more dividend than 95.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.67% |
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 33.52% of its income as dividend. This is a sustainable payout ratio.
DP33.52%
EPS Next 2Y2.16%
EPS Next 3Y3.21%
HONDA MOTOR CO LTD-SPONS ADR
NYSE:HMC (1/21/2025, 8:04:00 PM)
After market: 28.76 +0.06 (+0.21%)28.7
+0.46 (+1.63%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners44.48%
Inst Owner Change-0.21%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap44.38B
Analysts77.5
Price Target27.89 (-2.82%)
Short Float %0.24%
Short Ratio1.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.67% |
Yearly Dividend49.25
Dividend Growth(5Y)-14.82%
DP33.52%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-28.78%
Min EPS beat(2)-68.3%
Max EPS beat(2)10.74%
EPS beat(4)3
Avg EPS beat(4)10.05%
Min EPS beat(4)-68.3%
Max EPS beat(4)94.25%
EPS beat(8)5
Avg EPS beat(8)9.52%
EPS beat(12)7
Avg EPS beat(12)8.81%
EPS beat(16)11
Avg EPS beat(16)29.12%
Revenue beat(2)2
Avg Revenue beat(2)0.91%
Min Revenue beat(2)0.36%
Max Revenue beat(2)1.46%
Revenue beat(4)3
Avg Revenue beat(4)0.16%
Min Revenue beat(4)-2.16%
Max Revenue beat(4)1.46%
Revenue beat(8)3
Avg Revenue beat(8)-0.64%
Revenue beat(12)6
Avg Revenue beat(12)0.07%
Revenue beat(16)9
Avg Revenue beat(16)0.53%
PT rev (1m)-22.93%
PT rev (3m)-23.86%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.29%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.59%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.5%
Revenue NY rev (1m)1.21%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.14 | ||
| Fwd PE | 6.19 | ||
| P/S | 0.32 | ||
| P/FCF | N/A | ||
| P/OCF | 15.92 | ||
| P/B | 0.56 | ||
| P/tB | 0.61 | ||
| EV/EBITDA | 5.42 |
EPS(TTM)4.02
EY14.01%
EPS(NY)4.64
Fwd EY16.16%
FCF(TTM)-1.23
FCFYN/A
OCF(TTM)1.8
OCFY6.28%
SpS89.37
BVpS51.23
TBVpS47.06
PEG (NY)6.59
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 7.95% | ||
| ROCE | 6.73% | ||
| ROIC | 5.17% | ||
| ROICexc | 6.75% | ||
| ROICexgc | 7.19% | ||
| OM | 6.61% | ||
| PM (TTM) | 4.56% | ||
| GM | 21.61% | ||
| 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-Score6
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.82 | ||
| Cap/Depr | 93.27% | ||
| Cap/Sales | 3.4% | ||
| Interest Coverage | 3.7 | ||
| Cash Conversion | 19.68% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 1.81 |
F-Score6
WACC6.92%
ROIC/WACC0.75
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)4.75%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%-58.46%
EPS Next Y1.08%
EPS Next 2Y2.16%
EPS Next 3Y3.21%
EPS Next 5YN/A
Revenue 1Y (TTM)17.28%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%8.19%
Revenue Next Year5.53%
Revenue Next 2Y2.93%
Revenue Next 3Y2.95%
Revenue Next 5YN/A
EBIT growth 1Y39.47%
EBIT growth 3Y27.92%
EBIT growth 5Y13.73%
EBIT Next Year23964.8%
EBIT Next 3Y533.37%
EBIT Next 5YN/A
FCF growth 1Y-113.75%
FCF growth 3Y-35.69%
FCF growth 5Y-3.79%
OCF growth 1Y-83.99%
OCF growth 3Y-11.34%
OCF growth 5Y-0.75%