TSE:6902

Stock Analysis Report

Executive Summary

DENSO Corporation manufactures and sells automotive components and systems, industrial products, and home appliances.


Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

How has DENSO's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 6902 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.2%

6902

-3.8%

JP Auto Components

-3.8%

JP Market


1 Year Return

-9.8%

6902

-12.3%

JP Auto Components

-0.07%

JP Market

Return vs Industry: 6902 exceeded the JP Auto Components industry which returned -12% over the past year.

Return vs Market: 6902 underperformed the JP Market which returned 1.3% over the past year.


Shareholder returns

6902IndustryMarket
7 Day-2.2%-3.8%-3.8%
30 Day-6.9%-5.7%-5.3%
90 Day-12.2%-12.6%-5.6%
1 Year-7.1%-9.8%-9.5%-12.3%2.4%-0.07%
3 Year-6.7%-13.6%-13.2%-19.8%12.5%4.9%
5 Year-11.6%-22.1%-7.3%-18.5%22.3%9.5%

Price Volatility Vs. Market

How volatile is DENSO's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is DENSO undervalued compared to its fair value and its price relative to the market?

8.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 6902 (¥4328) is trading below our estimate of fair value (¥4746.66)

Significantly Below Fair Value: 6902 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 6902 is poor value based on its PE Ratio (16.9x) compared to the Auto Components industry average (10.2x).

PE vs Market: 6902 is poor value based on its PE Ratio (16.9x) compared to the JP market (14.9x).


Price to Earnings Growth Ratio

PEG Ratio: 6902 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: 6902 is overvalued based on its PB Ratio (0.9x) compared to the JP Auto Components industry average (0.5x).


Next Steps

Future Growth

How is DENSO forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

15.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6902's forecast earnings growth (15.5% per year) is above the savings rate (-0.09%).

Earnings vs Market: 6902's earnings (15.5% per year) are forecast to grow faster than the JP market (9.9% per year).

High Growth Earnings: 6902's earnings are forecast to grow, but not significantly.

Revenue vs Market: 6902's revenue (4.1% per year) is forecast to grow faster than the JP market (3.5% per year).

High Growth Revenue: 6902's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 6902's Return on Equity is forecast to be low in 3 years time (9.1%).


Next Steps

Past Performance

How has DENSO performed over the past 5 years?

0.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 6902 has high quality earnings.

Growing Profit Margin: 6902's current net profit margins (3.8%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: 6902's earnings have grown by 0.4% per year over the past 5 years.

Accelerating Growth: 6902's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 6902 had negative earnings growth (-24%) over the past year, making it difficult to compare to the Auto Components industry average (-19.4%).


Return on Equity

High ROE: 6902's Return on Equity (5.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is DENSO's financial position?


Financial Position Analysis

Short Term Liabilities: 6902's short term assets (¥2,339.2B) exceed its short term liabilities (¥1,206.9B).

Long Term Liabilities: 6902's short term assets (¥2,339.2B) exceed its long term liabilities (¥733.7B).


Debt to Equity History and Analysis

Debt Level: 6902's debt to equity ratio (12.4%) is considered satisfactory.

Reducing Debt: 6902's debt to equity ratio has reduced from 12.7% to 12.4% over the past 5 years.

Debt Coverage: 6902's debt is well covered by operating cash flow (122.5%).

Interest Coverage: 6902 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 6902 has a high level of physical assets or inventory.

Debt Coverage by Assets: 6902's debt is covered by short term assets (assets are 4.8x debt).


Next Steps

Dividend

What is DENSO's current dividend yield, its reliability and sustainability?

3.23%

Current Dividend Yield


Upcoming Dividend Payment

Purchase DENSO before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.5%markettop25%3.2%industryaverage3.2%forecastin3Years3.4%

Current dividend yield vs market & industry

Notable Dividend: 6902's dividend (3.23%) is higher than the bottom 25% of dividend payers in the JP market (1.44%).

High Dividend: 6902's dividend (3.23%) is in the top 25% of dividend payers in the JP market (3.21%)


Stability and Growth of Payments

Stable Dividend: 6902's dividend payments have been volatile in the past 10 years.

Growing Dividend: 6902's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54.6%), 6902's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Koji Arima (61yo)

4.7yrs

Tenure

JP¥128,000,000

Compensation

Mr. Koji Arima has been the Chief Executive Officer and President of Denso Corp. since June 19, 2015. Mr. Arima served as Senior Executive Director of Denso Corp. since June 19, 2014. Mr. Arima served as M ...


CEO Compensation Analysis

Compensation vs Market: Koji's total compensation ($USD1.16M) is below average for companies of similar size in the JP market ($USD1.76M).

Compensation vs Earnings: Koji's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Koji Arima
CEO, President & Director4.7yrsJP¥128.00m0.0035% ¥117.7m
Yasushi Matsui
Chief Financial Officer0.08yrsno datano data
Yasushi Yamanaka
Chief Quality Officer & Director0yrsno data0.0027% ¥89.2m
Hiroyuki Wakabayashi
Executive VP & Director3.7yrsno data0.0025% ¥85.2m
Sadahiro Usui
Executive Vice President1.1yrsno datano data
Toshiyuki Kato
Executive Vice President1.8yrsno datano data
Katsuhisa Shimokawa
Senior Executive Officer11.7yrsno datano data
Masahiko Ito
Senior Executive Officer5.7yrsno datano data
Hiroyuki Ina
Senior Executive Officer10.7yrsno datano data
Shingo Kuwamura
Senior Executive Officer1.1yrsno datano data

3.8yrs

Average Tenure

61yo

Average Age

Experienced Management: 6902's management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Koji Arima
CEO, President & Director4.7yrsJP¥128.00m0.0035% ¥117.7m
Yasushi Yamanaka
Chief Quality Officer & Director0yrsno data0.0027% ¥89.2m
Hiroyuki Wakabayashi
Executive VP & Director3.7yrsno data0.0025% ¥85.2m
Shoji Tsuzuki
Senior Executive Officer & Director1.7yrsno data0.0020% ¥66.7m
Akio Toyoda
Director1.1yrsno data0.0065% ¥216.3m
Atsuhiko Shimmura
Standing Audit & Supervisory Board Member5.7yrsno data0.00066% ¥22.1m
George C. Olcott
Outside Director5.7yrsno data0.00019% ¥6.4m
Shigeki Kushida
Outside Director1.1yrsno datano data
Yuko Mitsuya
Outside Director1.1yrsno datano data
Motomi Niwa
Audit & Supervisory Board Member1.7yrsno data0.00031% ¥10.4m

1.7yrs

Average Tenure

61.5yo

Average Age

Experienced Board: 6902's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

DENSO Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: DENSO Corporation
  • Ticker: 6902
  • Exchange: TSE
  • Founded: 1949
  • Industry: Auto Parts and Equipment
  • Sector: Automobiles
  • Market Cap: JP¥3.354t
  • Shares outstanding: 774.87m
  • Website: https://www.denso.com/global/en/

Number of Employees


Location

  • DENSO Corporation
  • 1-1, Showa-cho
  • Kariya
  • Aichi
  • 448-8661
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DNZO.YOTCPK (Pink Sheets LLC)ADRUSUSDMar 1991
6902TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1992
DNZO.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1992
DNODB (Deutsche Boerse AG)YesCommon StockDEEURJan 1992

Biography

DENSO Corporation manufactures and sells automotive components and systems, industrial products, and home appliances. It offers air-conditioning systems for cars and buses; truck refrigeration units; radiators and cooling systems; gasoline and diesel engine management systems; engine-related products; products for drive systems; hybrid and electric car drive systems, and power supply and related products; power supply and starting system parts; and small motor systems for automobiles. The company also provides electronic systems, services, and platforms that support various aspects of mobility; safety and automated driving products; connected cockpit products; powertrain control computers, body control computers, and other electronic devices; in-car semiconductor sensors and microelectronic devices, such as ICs; industrial automated equipment, modules, and industrial-use robots; and equipment for society, including handy terminals and QR solutions, as well as related services. In addition, it offers agricultural production equipment and cloud services, as well as after-sale services. The company operates in Japan, North America, Europe, Asia, and internationally. DENSO Corporation was founded in 1949 and is headquartered in Kariya, Japan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 15:23
End of Day Share Price2020/02/26 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.