Honda Motor (HMC) and Its Competitors Critical Analysis

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

Institutional and Insider Ownership

5.3% of Honda Motor shares are owned by institutional investors. Comparatively, 39.1% of shares of all “Automobiles” companies are owned by institutional investors. 0.0% of Honda Motor shares are owned by company insiders. Comparatively, 13.9% of shares of all “Automobiles” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Honda Motor and its competitors’ 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	-1,522.44%	-125.00%	-11.47%

Dividends

Honda Motor pays an annual dividend of $1.00 per share and has a dividend yield of 3.2%. 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 147.6% and pay out 7.2% of their earnings in the form of a dividend.

Earnings and Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Honda Motor	$144.79 billion	-$2.80 billion	-45.08
Honda Motor Competitors	$1,483.33 billion	$1.13 billion	6.66

Honda Motor’s competitors have higher revenue and earnings than Honda Motor. Honda Motor is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honda Motor	2	2	0	1	2.00
Honda Motor Competitors	2040	5033	6306	186	2.34

Honda Motor currently has a consensus price target of $25.00, indicating a potential downside of 20.78%. As a group, “Automobiles” companies have a potential upside of 77.37%. Given Honda Motor’s competitors stronger consensus rating and higher probable upside, analysts plainly believe Honda Motor has less favorable growth aspects than its competitors.

Risk and Volatility

Honda Motor has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, Honda Motor’s competitors have a beta of 0.96, suggesting that their average stock price is 4% less volatile than the S&P 500.

Summary

Honda Motor competitors beat Honda Motor on 10 of the 15 factors compared.

About Honda Motor

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, power, and other products in Japan, North America, Europe, Asia, and internationally. It operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Power Product and Other Businesses. The Motorcycle Business segment produces motorcycles, including sports, business, and commuter models; and various off-road vehicles, such as all-terrain vehicles and side-by-sides. The Automobile Business segment offers passenger cars, light trucks, and mini vehicles. The Financial Services Business segment provides various financial services, including retail lending and leasing services to customers, as well as wholesale financing services to dealers. The Power Product and Other Businesses manufactures and sells power products, such as general purpose engines, lawn mowers, generators, water pumps, brush cutters, tillers, outboard marine engines, and snow throwers. This segment also offers HondaJet aircraft. The company also sells spare parts; and provides after-sale services through retail dealers directly, as well as through independent distributors and licensees. Honda Motor Co., Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.