HONDA MOTOR CO LTD-SPONS ADR (HMC)
US4381283088 - ADR
HMC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 42 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 has a correct valuation and a medium 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.
In the past 5 years HMC always reported a positive cash flow from operatings.
1.2 Ratios
HMC has a Return On Assets of 3.37%. This is in the better half of the industry: HMC outperforms 78.57% of its industry peers.
HMC has a better Return On Equity (7.95%) than 73.81% of its industry peers.
HMC has a Return On Invested Capital of 5.17%. This is in the better half of the industry: HMC outperforms 78.57% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HMC is significantly below the industry average of 10.07%.
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 78.57% of its industry peers.
In the last couple of years the Profit Margin of HMC has grown nicely.
Looking at the Operating Margin, with a value of 6.61%, HMC belongs to the top of the industry, outperforming 80.95% of the companies in the same industry.
HMC's Operating Margin has improved in the last couple of years.
The Gross Margin of HMC (21.61%) is better than 85.71% 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
HMC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for HMC has been reduced compared to 1 year ago.
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
HMC has an Altman-Z score of 1.77. This is a bad value and indicates that HMC is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.77, HMC is doing good in the industry, outperforming 76.19% of the companies in the same industry.
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 | 1.77 |
ROIC/WACC0.8
WACC6.44%
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 52.38% of the companies in the same industry.
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 in line with its industry peers.
| 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 4.36% 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.
Looking at the last year, HMC shows a quite strong growth in Revenue. The Revenue has grown by 17.28% in the last year.
Measured over the past years, HMC shows a small growth in Revenue. The Revenue has been growing by 5.16% on average per year.
EPS 1Y (TTM)4.36%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%-58.61%
Revenue 1Y (TTM)17.28%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%8.19%
3.2 Future
Based on estimates for the next years, HMC will show a small growth in Earnings Per Share. The EPS will grow by 3.08% on average per year.
The Revenue is expected to grow by 2.79% on average over the next years.
EPS Next Y0.7%
EPS Next 2Y1.97%
EPS Next 3Y3.08%
EPS Next 5YN/A
Revenue Next Year4.27%
Revenue Next 2Y2.76%
Revenue Next 3Y2.79%
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.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 5.96, the valuation of HMC can be described as very cheap.
92.86% of the companies in the same industry are more expensive than HMC, based on the Price/Earnings ratio.
HMC is valuated cheaply when we compare the Price/Earnings ratio to 27.73, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 5.16 indicates a rather cheap valuation of HMC.
Based on the Price/Forward Earnings ratio, HMC is valued cheaper than 95.24% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.96 | ||
| Fwd PE | 5.16 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaper than 95.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HMC does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of HMC may justify a higher PE ratio.
PEG (NY)8.47
PEG (5Y)N/A
EPS Next 2Y1.97%
EPS Next 3Y3.08%
5. Dividend
5.1 Amount
HMC has a Yearly Dividend Yield of 5.57%, which is a nice return.
The stock price of HMC dropped by -26.99% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
HMC's Dividend Yield is rather good when compared to the industry average which is at 3.97. HMC pays more dividend than 95.24% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.57% |
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
33.52% of the earnings are spent on dividend by HMC. This is a low number and sustainable payout ratio.
DP33.52%
EPS Next 2Y1.97%
EPS Next 3Y3.08%
HONDA MOTOR CO LTD-SPONS ADR
NYSE:HMC (12/20/2024, 8:16:51 PM)
After market: 23.89 0 (0%)23.89
+0.19 (+0.8%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupAutomobiles & Components
GICS IndustryAutomobiles
Earnings (Last)
Earnings (Next)
Inst Owners44.48%
Inst Owner Change1.55%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap36.94B
Analysts76.8
Price Target36.19 (51.49%)
Short Float %0.05%
Short Ratio1.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.57% |
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)5.04%
PT rev (3m)-15.43%
EPS NQ rev (1m)-0.38%
EPS NQ rev (3m)-1.58%
EPS NY rev (1m)-0.38%
EPS NY rev (3m)-2.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.96 | ||
| Fwd PE | 5.16 | ||
| P/S | 0.27 | ||
| P/FCF | N/A | ||
| P/OCF | 13.28 | ||
| P/B | 0.47 | ||
| P/tB | 0.51 | ||
| EV/EBITDA | 4.95 |
EPS(TTM)4.01
EY16.79%
EPS(NY)4.63
Fwd EY19.37%
FCF(TTM)-1.23
FCFYN/A
OCF(TTM)1.8
OCFY7.53%
SpS89.16
BVpS51.11
TBVpS46.95
PEG (NY)8.47
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 | 1.77 |
F-Score6
WACC6.44%
ROIC/WACC0.8
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)4.36%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%-58.61%
EPS Next Y0.7%
EPS Next 2Y1.97%
EPS Next 3Y3.08%
EPS Next 5YN/A
Revenue 1Y (TTM)17.28%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%8.19%
Revenue Next Year4.27%
Revenue Next 2Y2.76%
Revenue Next 3Y2.79%
Revenue Next 5YN/A
EBIT growth 1Y39.47%
EBIT growth 3Y27.92%
EBIT growth 5Y13.73%
EBIT Next Year24020%
EBIT Next 3Y533.85%
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%