HONDA MOTOR CO LTD-SPONS ADR (HMC)
US4381283088 - ADR
HMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 41 industry peers in the Automobiles industry. HMC scores excellent on profitability, 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
HMC had positive earnings in the past year.
HMC had a positive operating cash flow in the past year.
In the past 5 years HMC has always been profitable.
HMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 3.64%, HMC is doing good in the industry, outperforming 75.61% of the companies in the same industry.
The Return On Equity of HMC (8.49%) is better than 78.05% of its industry peers.
With a decent Return On Invested Capital value of 5.06%, HMC is doing good in the industry, outperforming 73.17% 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 10.20%.
The 3 year average ROIC (3.75%) for HMC is below the current ROIC(5.06%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.64% | ||
| ROE | 8.49% | ||
| ROIC | 5.06% |
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 has a better Profit Margin (5.37%) than 78.05% of its industry peers.
In the last couple of years the Profit Margin of HMC has grown nicely.
The Operating Margin of HMC (6.94%) is better than 80.49% of its industry peers.
HMC's Operating Margin has improved in the last couple of years.
The Gross Margin of HMC (21.74%) is better than 82.93% of its industry peers.
HMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.94% | ||
| PM (TTM) | 5.37% | ||
| GM | 21.74% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HMC is destroying value.
Compared to 1 year ago, HMC has less shares outstanding
The number of shares outstanding for HMC has been increased compared to 5 years ago.
The debt/assets ratio for HMC is higher compared to a year ago.
2.2 Solvency
HMC has an Altman-Z score of 1.66. This is a bad value and indicates that HMC is not financially healthy and even has some risk of bankruptcy.
HMC's Altman-Z score of 1.66 is fine compared to the rest of the industry. HMC outperforms 70.73% of its industry peers.
A Debt/Equity ratio of 0.46 indicates that HMC is not too dependend on debt financing.
HMC has a Debt to Equity ratio (0.46) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.66 |
ROIC/WACC0.76
WACC6.63%
2.3 Liquidity
A Current Ratio of 1.37 indicates that HMC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.37, HMC perfoms like the industry average, outperforming 43.90% of the companies in the same industry.
HMC has a Quick Ratio of 1.07. 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 Quick ratio, with a value of 1.07, HMC is in line with its industry, outperforming 56.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.37 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
HMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.68%, which is quite impressive.
Measured over the past years, HMC shows a decrease in Earnings Per Share. The EPS has been decreasing by -8.17% on average per year.
Looking at the last year, HMC shows a very strong growth in Revenue. The Revenue has grown by 20.83%.
The Revenue has been growing slightly by 5.16% on average over the past years.
EPS 1Y (TTM)27.68%
EPS 3Y-15.97%
EPS 5Y-8.17%
EPS Q2Q%28.3%
Revenue 1Y (TTM)20.83%
Revenue growth 3Y15.76%
Revenue growth 5Y5.16%
Sales Q2Q%11.97%
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.
Based on estimates for the next years, HMC will show a small growth in Revenue. The Revenue will grow by 2.79% on average per year.
EPS Next Y1.08%
EPS Next 2Y2.16%
EPS Next 3Y3.21%
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.
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
With a Price/Earnings ratio of 5.30, the valuation of HMC can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 95.12% of the companies listed in the same industry.
HMC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.96.
HMC is valuated cheaply with a Price/Forward Earnings ratio of 5.61.
95.12% of the companies in the same industry are more expensive than HMC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.82, HMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.3 | ||
| Fwd PE | 5.61 |
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 97.56% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.31 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of HMC may justify a higher PE ratio.
PEG (NY)4.89
PEG (5Y)N/A
EPS Next 2Y2.16%
EPS Next 3Y3.21%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.14%, HMC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.74, HMC pays a better dividend. On top of this HMC pays more dividend than 95.12% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, HMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.14% |
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 29.01% of its income as dividend. This is a sustainable payout ratio.
DP29.01%
EPS Next 2Y2.16%
EPS Next 3Y3.21%
HONDA MOTOR CO LTD-SPONS ADR
NYSE:HMC (11/21/2024, 8:04:00 PM)
After market: 26.52 +0.29 (+1.11%)26.23
+0.05 (+0.19%)
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 Cap40.97B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.14% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.3 | ||
| Fwd PE | 5.61 | ||
| 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)4.89
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.64% | ||
| ROE | 8.49% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.94% | ||
| PM (TTM) | 5.37% | ||
| GM | 21.74% | ||
| 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 Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.37 | ||
| Quick Ratio | 1.07 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)27.68%
EPS 3Y-15.97%
EPS 5Y
EPS Q2Q%
EPS Next Y1.08%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)20.83%
Revenue growth 3Y15.76%
Revenue growth 5Y
Sales 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
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y