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Bull of the Day: Honda Motor Company (HMC)

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Honda Motor Co. (HMC - Free Report) is a leading manufacturer of automobiles and motorcycles, recognized internationally for its wide variety of products that range from small general-purpose engines to specialty sports cars.

The stock is currently a Zacks Rank #1 (Strong Buy), with analysts raising their outlooks across all timeframes.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, the company is part of the Zacks Automotive – Foreign industry, currently ranked in the top 25% of all Zacks industries. Aside from the improved earnings outlook and favorable industry standing, let’s take a closer look at a few other aspects of the company.

Honda Motor

Honda Motor shares have shown solid relative strength over the last month, tacking on nearly 6% and outperforming the S&P 500 handily. Shares are looking to break out of a multi-year consolidation period, with positive earnings estimate revisions helping drive the move.

Zacks Investment Research
Image Source: Zacks Investment Research

Investors also stand to reap a steady income from HMC shares, currently yielding a solid 2.8% annually paired with a sustainable payout ratio sitting at 21% of the company’s earnings. The payout has also grown nicely, with HMC sporting a 3.3% five-year annualized dividend growth rate.

Shares aren’t expensive given the company’s forecasted growth, with earnings forecasted to recover 35% in its current fiscal year on nearly 15% higher sales. Shares presently trade at a 7.9X forward earnings multiple, comparing favorably to the respective Zacks industry average of 8.9X.

The stock carries a Style Score of ‘A’ for Value.

Zacks Investment Research
Image Source: Zacks Investment Research

Keep an eye out for the company’s next quarterly release scheduled for February 9th, as the Zacks Consensus EPS Estimate of $0.85 has been revised more than 20% higher since last November. Analysts have also been bullish regarding the top line, with the $37.7 billion quarterly revenue estimate 11% higher over the same timeframe.

Earnings are forecasted to decline 16% from the year-ago period, with revenue suggested to climb nearly 20% year-over-year.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Honda Motor Company (HMC - Free Report) would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).


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