Honda Motor Co Ltd, known by the ticker symbol HMC, is a large cap automobile company, operating in the consumer cyclical business sector. This is my second report on HMC for this Viital stock portfolio. I last reviewed it on November 24th.

Incorporated in 1948, Honda Motor was originally a motorcycle manufacturer. 

Today, the firm makes automobiles, motorcycles, and power products such as boat engines, generators, and lawnmowers. 

Honda sold 19.7 million cars and motorcycles in fiscal 2021 (4.5 million of which were autos), and consolidated sales were JPY 13.2 trillion. Automobiles constitute 65% of revenue and motorcycles 14%, with the rest split between power products and financial services. Honda also makes robots and private jets.

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.

Photo by Chris Liverani on Unsplash

Three key data points gauge any dividend equity or fund such as Honda Motor Co Ltd, (HMC):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

HMC Price

Honda's price per share was $29.00 as of Friday's market close. One year ago its price was $26.48. Therefore Honda's share price rose $2.52 or just over 9.5% in the past year.

If Honda's stock trades in the range of $25.00 to $40.00 this next year, its recent $29.00 share price might rise by $7.00 to reach $36.00  by January 31, 2023. This estimate equates to the median of 1 year target estimates from three analysts tracking HMC for their brokerages.

HMC Dividends

Honda Motor Co Ltd,'s most recent quarterly dividend of $0.48 was paid to shareholders December 8th, to those on record as of September 28th. The Honda estimated Annual dividend payout per share of $1.44 yields 4.97% per yesterday's $29.00. closing price. 

HMC has paid variable quarterly and semi-annual dividend payouts since June,1985. That stretch marks 37 years come June.

HMC Returns

Adding the $1.44 annual estimated HMC forward-looking dividend to the estimated one-year share price upside estimate of $7.00 shows a $8.44 potential gross gain, per share, to be reduced by any costs to trade HMC shares.  

At Friday's $29.00 price per share, a little under $1000 would buy 34 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.29 per share.

Subtract that maybe $0.29 brokerage cost from my estimated $8.44 gross gain estimate per share results in a net gain of $8.15 X 34 shares = $277.10 for a 27.71% net gain on a $986.00 investment.

So it is that Honda Motor Co Ltd,(HMC) shows a possible 27.71% net gain including a 4.97% forward estimated dividend yield. 

Over the next year at this time our $1000 investment in Honda Motor Co Ltd, (HMC)  could generate $49.70 in cash dividends alone. Note that a single share of HMC stock bought at Friday's HMCs share price is  $20.70 below the dividend income from $1000.00 invested. So, by my dogcatcher ideal, now is a good point to pickup Honda Motor Co Ltd, (HMC) shares. The estimated next-year dividend from $1K invested is  $20.70  more than BEN's single share price. Consider yourself alerted. Its a sign!   

All of the estimates above are speculation based on the past history of Honda Motor Co Ltd, (HMC). Only time and money invested in this stock will determine its market value.