Critical Review: Honda Motor (HMC) & Its Competitors

Honda Motor (NYSE:HMC) is one of 119 public companies in the “Automobiles” industry, but how does it weigh in compared to its peers? We will compare Honda Motor to related businesses based on the strength of its risk, institutional ownership, valuation, analyst recommendations, earnings, profitability and dividends.

Dividends

Honda Motor pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. Honda Motor pays out -142.9% of its earnings in the form of a dividend. As a group, “Automobiles” companies pay a dividend yield of 107.1% and pay out 7.2% of their earnings in the form of a dividend.

Earnings & Valuation

This table compares Honda Motor and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Honda Motor	$23,201.59 billion	-$2.80 billion	-47.66
Honda Motor Competitors	$2,023.30 billion	$1.13 billion	7.62

Honda Motor has higher revenue, but lower earnings than its peers. Honda Motor is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings and target prices for Honda Motor and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honda Motor	1	2	0	2	2.60
Honda Motor Competitors	2142	5146	6400	191	2.33

Honda Motor currently has a consensus target price of $34.00, suggesting a potential upside of 1.90%. As a group, “Automobiles” companies have a potential upside of 70.84%. Given Honda Motor’s peers higher possible upside, analysts plainly believe Honda Motor has less favorable growth aspects than its peers.

Institutional and Insider Ownership

5.3% of Honda Motor shares are owned by institutional investors. Comparatively, 39.2% of shares of all “Automobiles” companies are owned by institutional investors. 0.0% of Honda Motor shares are owned by company insiders. Comparatively, 14.6% of shares of all “Automobiles” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Honda Motor has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500. Comparatively, Honda Motor’s peers have a beta of 1.02, suggesting that their average share price is 2% more volatile than the S&P 500.

Profitability

This table compares Honda Motor and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Honda Motor	-0.73%	-1.30%	-0.49%
Honda Motor Competitors	-1,479.48%	-126.30%	-12.04%

Summary

Honda Motor peers beat Honda Motor on 8 of the 15 factors compared.

Honda Motor Company Profile

Honda Motor Co., Ltd. is a Japan-based manufacturer of automobiles, motorcycles and other mobility products. Its vehicle lineup includes passenger cars, SUVs and electrified models, while its motorcycle business serves consumers and commercial users in markets around the world. The company also makes power equipment, marine engines and other products, and provides financial services that support vehicle and equipment sales. Honda’s aviation subsidiary, Honda Aircraft Company, develops and manufactures the HondaJet business aircraft.