Toyota Motor Corp Ltd Ord (TM) and Honda Motor Company (HMC) Financial Analysis
Toyota Motor Corp Ltd Ord (NYSE: TM) and Honda Motor Company (NYSE:HMC) are both large-cap auto/tires/trucks companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitabiliy, dividends, analyst recommendations and institutional ownership.
Toyota Motor Corp Ltd Ord pays an annual dividend of $3.54 per share and has a dividend yield of 3.4%. Honda Motor Company pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Toyota Motor Corp Ltd Ord pays out 32.0% of its earnings in the form of a dividend. Honda Motor Company pays out 23.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
This is a summary of current recommendations and price targets for Toyota Motor Corp Ltd Ord and Honda Motor Company, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Toyota Motor Corp Ltd Ord||0||3||1||0||2.25|
|Honda Motor Company||0||0||2||0||3.00|
Toyota Motor Corp Ltd Ord currently has a consensus price target of $116.00, indicating a potential upside of 10.58%. Honda Motor Company has a consensus price target of $35.00, indicating a potential upside of 25.63%. Given Honda Motor Company’s stronger consensus rating and higher possible upside, analysts plainly believe Honda Motor Company is more favorable than Toyota Motor Corp Ltd Ord.
Risk and Volatility
Toyota Motor Corp Ltd Ord has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Honda Motor Company has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.
Insider and Institutional Ownership
0.9% of Toyota Motor Corp Ltd Ord shares are held by institutional investors. Comparatively, 2.6% of Honda Motor Company shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Toyota Motor Corp Ltd Ord and Honda Motor Company’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Toyota Motor Corp Ltd Ord||6.64%||10.29%||3.89%|
|Honda Motor Company||4.44%||8.54%||3.41%|
Earnings and Valuation
This table compares Toyota Motor Corp Ltd Ord and Honda Motor Company’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Toyota Motor Corp Ltd Ord||$248.15 billion||0.63||$32.42 billion||$11.07||9.48|
|Honda Motor Company||$125.88 billion||0.40||$13.62 billion||$3.18||8.76|
Toyota Motor Corp Ltd Ord has higher revenue and earnings than Honda Motor Company. Honda Motor Company is trading at a lower price-to-earnings ratio than Toyota Motor Corp Ltd Ord, indicating that it is currently the more affordable of the two stocks.
Toyota Motor Corp Ltd Ord beats Honda Motor Company on 9 of the 15 factors compared between the two stocks.
About Toyota Motor Corp Ltd Ord
Toyota Motor Corporation (Toyota) conducts business in the automotive industry. The Company also conducts business in finance and other industries. The Company’s segments include Automotive, Financial Services and All Other. Toyota sells its vehicles in approximately 190 countries and regions. Toyota’s markets for its automobiles are Japan, North America, Europe and Asia. The Company’s Automotive segment includes the design, manufacture, assembly and sale of passenger vehicles, minivans and commercial vehicles, such as trucks and related parts and accessories. The Company’s Financial Services segment consists of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. The All Other segment includes the design, manufacturing and sale of housing, telecommunications and other businesses. Its information technology related businesses include a Web portal for automobile information called GAZOO.com.
About Honda Motor Company
Honda Motor Co., Ltd. (Honda) develops, manufactures and markets motorcycles, automobiles and power products across the world. The Company’s segments include Motorcycle Business, Automobile business, Financial services business, and Power product and other businesses. The Company produces a range of motorcycles, with engine displacement ranging from the 50 cubic centimeters class to the 1,800 cubic centimeters class. Its automobiles use gasoline engines of three, four or six cylinder, diesel engines, gasoline-electric hybrid systems and gasoline-electric plug-in hybrid systems. Honda offers a range of financial services to its customers and dealers through finance subsidiaries in countries, including Japan, the United States, Canada, the United Kingdom, Germany, Brazil and Thailand. Honda manufactures a range of power products, including general-purpose engines, generators, water pumps, lawn mowers, riding mowers, grass cutters, brush cutters, tillers and snow blowers.
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