TSE:4452

Stock Analysis Report

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Market Cap

JP¥3.3t

Last Updated

2021/06/12 11:05 UTC

Data Sources

Company Financials +

Executive Summary

Kao Corporation develops and sells cosmetic, skin/hair care, human health care, fabric and home care, and chemical products. More Details

Rewards

Trading at 8% below our estimate of its fair value

Earnings are forecast to grow 7.29% per year

Pays a reliable dividend of 2.1%

Risk Analysis

No risks detected for 4452 from our risk checks.


Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 4452 is less volatile than 75% of JP stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: 4452's weekly volatility (2%) has been stable over the past year.


Market Performance


7 Day Return

3.4%

4452

2.2%

JP Personal Products

0.06%

JP Market


1 Year Return

-20.8%

4452

1.6%

JP Personal Products

23.0%

JP Market

Return vs Industry: 4452 underperformed the JP Personal Products industry which returned 1.7% over the past year.

Return vs Market: 4452 underperformed the JP Market which returned 23.1% over the past year.


Shareholder returns

4452IndustryMarket
7 Day3.4%2.2%0.06%
30 Day1.2%6.1%5.5%
90 Day-3.5%-0.5%0.02%
1 Year-19.4%-20.8%2.8%1.6%25.7%23.0%
3 Year-16.8%-20.6%-17.5%-20.5%16.7%8.7%
5 Year28.8%19.1%87.8%75.6%72.5%53.5%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

8.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 4452 (¥6869) is trading below our estimate of fair value (¥7469.1)

Significantly Below Fair Value: 4452 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 4452 is good value based on its PE Ratio (26.4x) compared to the JP Personal Products industry average (35.7x).

PE vs Market: 4452 is poor value based on its PE Ratio (26.4x) compared to the JP market (16.3x).


Price to Earnings Growth Ratio

PEG Ratio: 4452 is poor value based on its PEG Ratio (3.6x)


Price to Book Ratio

PB vs Industry: 4452 is overvalued based on its PB Ratio (3.6x) compared to the JP Personal Products industry average (3x).


Future Growth

How is Kao forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

7.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 4452's forecast earnings growth (7.3% per year) is above the savings rate (0%).

Earnings vs Market: 4452's earnings (7.3% per year) are forecast to grow slower than the JP market (13.3% per year).

High Growth Earnings: 4452's earnings are forecast to grow, but not significantly.

Revenue vs Market: 4452's revenue (2.9% per year) is forecast to grow slower than the JP market (5.3% per year).

High Growth Revenue: 4452's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 4452's Return on Equity is forecast to be low in 3 years time (15.2%).


Past Performance

How has Kao performed over the past 5 years?

2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 4452 has high quality earnings.

Growing Profit Margin: 4452's current net profit margins (9.2%) are lower than last year (9.9%).


Past Earnings Growth Analysis

Earnings Trend: 4452's earnings have grown by 2.9% per year over the past 5 years.

Accelerating Growth: 4452's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 4452 had negative earnings growth (-15.7%) over the past year, making it difficult to compare to the Personal Products industry average (-17.7%).


Return on Equity

High ROE: 4452's Return on Equity (13.8%) is considered low.


Financial Health

How is Kao's financial position?


Financial Position Analysis

Short Term Liabilities: 4452's short term assets (¥710.9B) exceed its short term liabilities (¥373.5B).

Long Term Liabilities: 4452's short term assets (¥710.9B) exceed its long term liabilities (¥307.0B).


Debt to Equity History and Analysis

Debt Level: 4452's debt to equity ratio (13.8%) is considered satisfactory.

Reducing Debt: 4452's debt to equity ratio has reduced from 17.8% to 13.8% over the past 5 years.

Debt Coverage: 4452's debt is well covered by operating cash flow (162.6%).

Interest Coverage: 4452 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Kao current dividend yield, its reliability and sustainability?

2.10%

Current Dividend Yield


Upcoming Dividend Payment

TodayJun 13 2021Ex Dividend DateJun 29 2021Dividend Pay DateSep 01 202164 days from Ex DividendBuy in the next 16 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: 4452's dividend (2.1%) is higher than the bottom 25% of dividend payers in the JP market (1.32%).

High Dividend: 4452's dividend (2.1%) is low compared to the top 25% of dividend payers in the JP market (2.99%).


Stability and Growth of Payments

Stable Dividend: 4452's dividends per share have been stable in the past 10 years.

Growing Dividend: 4452's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (53.7%), 4452'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?

2.4yrs

Average management tenure


CEO

Yoshihiro Hasebe (60 yo)

0.42

Tenure

Mr. Yoshihiro Hasebe serves as President and Chief Execuitve Officer at Kao Corporation since January 1, 2021 and served as its Senior Vice President of Global Research & Development since March 2015 until...


Leadership Team

Experienced Management: 4452's management team is considered experienced (2.4 years average tenure).


Board Members

Experienced Board: 4452's board of directors are considered experienced (3.3 years average tenure).


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

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


Key Information

  • Name: Kao Corporation
  • Ticker: 4452
  • Exchange: TSE
  • Founded: 1887
  • Industry: Personal Products
  • Sector: Household
  • Market Cap: JP¥3.256t
  • Shares outstanding: 474.08m
  • Website: https://www.kao.com/jp/

Number of Employees


Location

  • Kao Corporation
  • 1-14-10 Niyabashi-Kayabacho
  • Chuo-ku
  • Tokyo
  • 103-8210
  • Japan

Listings


Biography

Kao Corporation develops and sells cosmetic, skin/hair care, human health care, fabric and home care, and chemical products. It offers face, body, and oral care products; and bath healthcare products, hair...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/12 11:05
End of Day Share Price2021/06/11 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


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.