Critical Comparison: Honda Motor (HMC) & Its Competitors

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

Insider & Institutional 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.

Profitability

This table compares Honda Motor and its rivals’ 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	-1,371.58%	-126.21%	-10.44%

Volatility & Risk

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

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 150.8% and pay out 7.2% of their earnings in the form of a dividend.

Earnings and Valuation

This table compares Honda Motor and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Honda Motor	$144.79 billion	-$2.80 billion	-45.09
Honda Motor Competitors	$53.45 billion	$1.13 billion	4.98

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Honda Motor and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honda Motor	2	2	0	1	2.00
Honda Motor Competitors	2036	5029	6302	185	2.34

Honda Motor presently has a consensus price target of $25.00, indicating a potential downside of 20.80%. As a group, “Automobiles” companies have a potential upside of 80.27%. Given Honda Motor’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Honda Motor has less favorable growth aspects than its rivals.

Summary

Honda Motor rivals beat Honda Motor on 9 of the 15 factors compared.

Honda Motor Company Profile

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.