DENSO Corp. (6902) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Niterra Co., Ltd.

Toyoda Gosei Co., Ltd.

NSK Ltd.

Toyota Boshoku Corp.

Aisin Corp.

DENSO Corp.

TOKAI RIKA CO., LTD.

JTEKT Corp.

Koito Manufacturing Co., Ltd.

NHK Spring Co., Ltd.

Stanley Electric Co., Ltd.

Why is DENSO Corp. ?

Poor Management Efficiency with a low ROE of 6.90%

The company has been able to generate a Return on Equity (avg) of 6.90% signifying low profitability per unit of shareholders funds

Weak Long Term Fundamental Strength with a 31.18% CAGR growth in Operating Profits over the last 5 years

The company has been able to generate a Return on Equity (avg) of 6.90% signifying low profitability per unit of shareholders funds

Poor long term growth as Operating profit has grown by an annual rate 31.18% of over the last 5 years

Negative results in Jun 26

INTEREST(HY) At JPY 18,942 MM has Grown at 51.21%
OPERATING CASH FLOW(Y) Lowest at JPY 585,606 MM
INTEREST COVERAGE RATIO(Q) Lowest at 2,154.02

With ROE of 8.88%, it has a very attractive valuation with a 1.00 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -5.81%, its profits have risen by 4.8% ; the PEG ratio of the company is 2.4

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to DENSO Corp. should be less than 10%
Overall Portfolio exposure to Auto Components & Equipments should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Auto Components & Equipments)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is DENSO Corp. for you?

Low Risk, High Return

Absolute

Risk Adjusted

Volatility

DENSO Corp.

-5.81%

142.53

28.87%

Japan Nikkei 225

59.79%

2.03

29.50%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

8.84%

EBIT Growth (5y)

31.18%

EBIT to Interest (avg)

28.06

Debt to EBITDA (avg)

0.11

Net Debt to Equity (avg)

-0.06

Sales to Capital Employed (avg)

1.20

Tax Ratio

21.45%

Dividend Payout Ratio

41.11%

Pledged Shares

Institutional Holding

0.00%

ROCE (avg)

9.06%

ROE (avg)

6.90%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.00

EV to EBIT

9.01

EV to EBITDA

5.42

EV to Capital Employed

1.00

EV to Sales

0.68

PEG Ratio

2.36

Dividend Yield

ROCE (Latest)

11.14%

ROE (Latest)

8.88%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

RSI

No Signal

Bollinger Bands

Sideways

Bearish

Moving Averages

Bearish (Daily)

KST

Mildly Bullish

Dow Theory

Mildly Bearish

No Trend

OBV

Mildly Bearish

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

4What is working for the Company

DEBTORS TURNOVER RATIO(HY)

Highest at 6.39 times

NET PROFIT(9M)

Higher at JPY 380,273 MM

CASH AND EQV(HY)

Highest at JPY 2,618,251 MM

-18What is not working for the Company

INTEREST(HY)

At JPY 18,942 MM has Grown at 51.21%

OPERATING CASH FLOW(Y)

Lowest at JPY 585,606 MM

INTEREST COVERAGE RATIO(Q)

Lowest at 2,154.02

RAW MATERIAL COST(Y)

Grown by 8.76% (YoY

OPERATING PROFIT(Q)

Lowest at JPY 178,353 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 9.32 %

PRE-TAX PROFIT(Q)

At JPY 107,273 MM has Fallen at -29.07%

NET PROFIT(Q)

At JPY 67,875 MM has Fallen at -38.82%

Here's what is working for DENSO Corp.

Debtors Turnover Ratio

Highest at 6.39 times and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Cash and Eqv

Highest at JPY 2,618,251 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Here's what is not working for DENSO Corp.

Interest

At JPY 18,942 MM has Grown at 51.21%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Operating Cash Flow

Lowest at JPY 585,606 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (JPY MM)

Interest Coverage Ratio

Lowest at 2,154.02

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Operating Profit

Lowest at JPY 178,353 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (JPY MM)

Operating Profit Margin

Lowest at 9.32 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Pre-Tax Profit

At JPY 107,273 MM has Fallen at -29.07%

over average net sales of the previous four periods of JPY 151,230.5 MM

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (JPY MM)

Net Profit

At JPY 67,875 MM has Fallen at -38.82%

over average net sales of the previous four periods of JPY 110,938.75 MM

MOJO Watch

Near term Net Profit trend is negative

Net Profit (JPY MM)

Raw Material Cost

Grown by 8.76% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales