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

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

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NHK Spring Co., Ltd.

DENSO Corp.

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

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 29.69

Low Debt Company with Strong Long Term Fundamental Strength

Negative results in Jun 25

INTEREST(HY) At JPY 12,527 MM has Grown at 10.6%
OPERATING CASH FLOW(Y) Lowest at JPY 649,949 MM
OPERATING PROFIT(Q) Lowest at JPY 198,998 MM

With ROE of 9.35%, it has a very attractive valuation with a 1.11 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 -3.07%, its profits have risen by 30.2% ; the PEG ratio of the company is 0.3

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -3.07% returns in the last 1 year, the stock has also underperformed Japan Nikkei 225 in each of the last 3 annual periods

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.

-3.07%

149.87

29.89%

Japan Nikkei 225

28.54%

1.11

25.75%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

6.80%

EBIT Growth (5y)

52.15%

EBIT to Interest (avg)

29.69

Debt to EBITDA (avg)

0.11

Net Debt to Equity (avg)

-0.06

Sales to Capital Employed (avg)

1.19

Tax Ratio

19.81%

Dividend Payout Ratio

44.13%

Pledged Shares

Institutional Holding

0.00%

ROCE (avg)

7.59%

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

1.11

EV to EBIT

10.53

EV to EBITDA

6.00

EV to Capital Employed

1.12

EV to Sales

0.73

PEG Ratio

0.29

Dividend Yield

ROCE (Latest)

10.62%

ROE (Latest)

9.35%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Mildly Bullish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Mildly Bullish

Dow Theory

Mildly Bullish

No Trend

OBV

Mildly Bearish

No Trend

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

3What is working for the Company

INVENTORY TURNOVER RATIO(HY)

Highest at 5.01%

CASH AND EQV(HY)

Highest at JPY 2,123,800 MM

-9What is not working for the Company

INTEREST(HY)

At JPY 12,527 MM has Grown at 10.6%

OPERATING CASH FLOW(Y)

Lowest at JPY 649,949 MM

OPERATING PROFIT(Q)

Lowest at JPY 198,998 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 11.34 %

NET PROFIT(Q)

Lowest at JPY 79,268 MM

EPS(Q)

Lowest at JPY 28.5

Here's what is working for DENSO Corp.

Inventory Turnover Ratio

Highest at 5.01% and Grown

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

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Cash and Eqv

Highest at JPY 2,123,800 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 12,527 MM has Grown at 10.6%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Operating Cash Flow

Lowest at JPY 649,949 MM

in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (JPY MM)

Operating Profit

Lowest at JPY 198,998 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (JPY MM)

Operating Profit Margin

Lowest at 11.34 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Net Profit

Lowest at JPY 79,268 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (JPY MM)

EPS

Lowest at JPY 28.5

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (JPY)