A Look at Capcom (TSE:9697) Valuation Following Dividend Hike and Renewed Shareholder Focus

Capcom (TSE:9697) just announced it will raise its second quarter-end dividend to ¥20.00 per share, up from last year’s ¥18.00. Dividend payouts are scheduled to begin on November 17, 2025, attracting investor attention.

See our latest analysis for Capcom.

The dividend hike comes as Capcom’s share price holds steady around ¥4,071, with momentum building over the year thanks to a 27.1% total shareholder return. Occasional pullbacks, such as this month’s dip, have been balanced by solid long-term performance, reflecting optimism about Capcom’s growth prospects and fundamentals.

If Capcom’s recent moves have you rethinking your strategy, this may be a good time to broaden your investing horizons and discover fast growing stocks with high insider ownership

With shares currently trading below analyst price targets and a history of resilient returns, investors may wonder if Capcom is temporarily undervalued or if the market is already reflecting its anticipated growth in the stock price.

Most Popular Narrative: 11.9% Undervalued

Capcom's widely tracked fair value estimate sits above the last close, suggesting a meaningful valuation gap could exist for investors following this outlook.

Capcom's strategy to accelerate global expansion, particularly in emerging markets and through increased support for PC platforms, directly positions the company to capitalize on the ongoing growth in the worldwide gaming population, driving long-term revenue and potential international earnings growth.

Read the complete narrative.

Think you know why this price target stands out? The surprising part is that analyst forecasts are built on bold profit margin improvements and a steep future earnings multiple. Find out which assumptions could be game-changers by digging into the full narrative.

Result: Fair Value of ¥4,620.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, overreliance on aging franchises or surging development costs could challenge Capcom’s earnings trajectory if new releases fail to meet expectations.

Find out about the key risks to this Capcom narrative.

Another View: SWS DCF Model Tells a Different Story

While the analyst price target signals Capcom may be undervalued, our DCF model produces a far more conservative estimate, putting the fair value at ¥1,902.4, which is significantly below the current share price. Could reliance on long-term cash flow projections be masking upside, or does this approach reveal hidden risks?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Capcom for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 860 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Capcom Narrative

If you have your own take on Capcom’s outlook or simply want to test your research skills, you can shape your own story in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Capcom.

Looking for More Investment Ideas?

Smart investors never limit their options. Take charge of your portfolio potential now by checking out these curated opportunities you simply can't afford to ignore.

• Accelerate your growth strategy by targeting these 24 AI penny stocks at the forefront of artificial intelligence breakthroughs that are shaking up entire industries.
• Boost your yield and secure reliable income streams as you browse these 17 dividend stocks with yields > 3% currently offering attractive returns above 3%.
• Position yourself for tomorrow's digital frontier by tracking these 82 cryptocurrency and blockchain stocks that are driving real progress in cryptocurrency and blockchain innovation.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com