Honda Motor (HMC) versus Adient (ADNT) Critical Analysis
Honda Motor (NYSE: HMC) and Adient (NYSE:ADNT) are both mid-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.
This table compares Honda Motor and Adient’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Honda Motor pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Adient pays an annual dividend of $1.10 per share and has a dividend yield of 1.4%. Honda Motor pays out 17.7% of its earnings in the form of a dividend. Adient pays out 11.6% 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. Adient has raised its dividend for 3 consecutive years.
This is a summary of recent ratings and price targets for Honda Motor and Adient, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Honda Motor currently has a consensus price target of $36.36, indicating a potential upside of 8.47%. Adient has a consensus price target of $76.43, indicating a potential downside of 4.92%. Given Honda Motor’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Honda Motor is more favorable than Adient.
Institutional & Insider Ownership
2.4% of Honda Motor shares are owned by institutional investors. Comparatively, 92.7% of Adient shares are owned by institutional investors. 0.1% of Adient shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Honda Motor and Adient’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Honda Motor||$124.78 billion||0.49||$5.73 billion||$3.17||10.57|
|Adient||$16.21 billion||0.46||$877.00 million||$9.47||8.49|
Honda Motor has higher revenue and earnings than Adient. Adient is trading at a lower price-to-earnings ratio than Honda Motor, indicating that it is currently the more affordable of the two stocks.
Adient beats Honda Motor on 9 of the 16 factors compared between the two stocks.
About Honda Motor
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.
Adient plc, formerly Adient Limited, is an automotive seating supplier. The Company designs, manufactures and markets a range of seating systems and components for passenger cars, commercial vehicles, and light trucks, including vans, pick-up trucks, and sport/crossover utility vehicles. The Company operates through two segments: Seating and Interiors. The Seating segment produces automotive seat metal structures, and mechanisms, foam, trim, fabric and complete seat systems. The Interiors segment produces instrument panels, floor consoles, door panels, overhead consoles, cockpit systems, decorative trim and other products. The Company also supplies various seating systems to the international motorsports industry through its RECARO brand of products. It operates approximately 230 manufacturing or assembly facilities, with operations in over 30 countries. Its technologies focus on offering automotive seating solutions in a range of areas, including frames, armrests and fabrics.
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