TSE:6501

Stock Analysis Report

Executive Summary

Hitachi, Ltd. provides information technology, energy, industry, mobility, and smart life solutions in Japan and internationally.


Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 6501's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

26.7%

6501

15.0%

JP Electronic

13.5%

JP Market


1 Year Return

-9.3%

6501

-2.8%

JP Electronic

-8.2%

JP Market

Return vs Industry: 6501 underperformed the JP Electronic industry which returned -2.8% over the past year.

Return vs Market: 6501 underperformed the JP Market which returned -8.2% over the past year.


Shareholder returns

6501IndustryMarket
7 Day26.7%15.0%13.5%
30 Day-10.6%-7.8%-7.4%
90 Day-29.7%-18.1%-15.9%
1 Year-8.4%-9.3%-1.9%-2.8%-6.9%-8.2%
3 Year13.9%8.0%20.2%15.6%2.8%-3.2%
5 Year-13.7%-21.7%24.4%15.3%6.5%-3.9%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

44.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 6501 (¥3253) is trading below our estimate of fair value (¥5885.37)

Significantly Below Fair Value: 6501 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 6501 is poor value based on its PE Ratio (15.6x) compared to the Electronic industry average (13.7x).

PE vs Market: 6501 is poor value based on its PE Ratio (15.6x) compared to the JP market (12.8x).


Price to Earnings Growth Ratio

PEG Ratio: 6501 is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: 6501 is overvalued based on its PB Ratio (1x) compared to the JP Electronic industry average (0.7x).


Next Steps

Future Growth

How is Hitachi forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

19.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6501's forecast earnings growth (19.9% per year) is above the savings rate (-0.09%).

Earnings vs Market: 6501's earnings (19.9% per year) are forecast to grow faster than the JP market (9.4% per year).

High Growth Earnings: 6501's earnings are forecast to grow, but not significantly.

Revenue vs Market: 6501's revenue (4.2% per year) is forecast to grow faster than the JP market (3.3% per year).

High Growth Revenue: 6501's revenue (4.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 6501's Return on Equity is forecast to be low in 3 years time (11.5%).


Next Steps

Past Performance

How has Hitachi performed over the past 5 years?

-1.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 6501 has a large one-off loss of ¥166.0B impacting its December 31 2019 financial results.

Growing Profit Margin: 6501's current net profit margins (2.2%) are higher than last year (2.2%).


Past Earnings Growth Analysis

Earnings Trend: 6501's earnings have declined by -1% per year over the past 5 years.

Accelerating Growth: 6501's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 6501 had negative earnings growth (-3.2%) over the past year, making it difficult to compare to the Electronic industry average (-10.4%).


Return on Equity

High ROE: 6501's Return on Equity (5.7%) is considered low.


Next Steps

Financial Health

How is Hitachi's financial position?


Financial Position Analysis

Short Term Liabilities: 6501's short term assets (¥5,543.6B) exceed its short term liabilities (¥4,193.8B).

Long Term Liabilities: 6501's short term assets (¥5,543.6B) exceed its long term liabilities (¥1,725.3B).


Debt to Equity History and Analysis

Debt Level: 6501's debt to equity ratio (34.7%) is considered satisfactory.

Reducing Debt: 6501's debt to equity ratio has reduced from 84.2% to 34.7% over the past 5 years.

Debt Coverage: 6501's debt is well covered by operating cash flow (47.3%).

Interest Coverage: 6501 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 6501 has a high level of physical assets or inventory.

Debt Coverage by Assets: 6501's debt is covered by short term assets (assets are 3.7x debt).


Next Steps

Dividend

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

2.77%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 6501's dividend (2.77%) is higher than the bottom 25% of dividend payers in the JP market (1.65%).

High Dividend: 6501's dividend (2.77%) is low compared to the top 25% of dividend payers in the JP market (3.69%).


Stability and Growth of Payments

Stable Dividend: 6501's dividends per share have been stable in the past 10 years.

Growing Dividend: 6501's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (43.2%), 6501's dividend payments are well 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?

5.9yrs

Average management tenure


CEO

Toshiaki Higashihara (64yo)

3.92s

Tenure

JP¥368,000,000

Compensation

Mr. Toshiaki Higashihara has been the President and Representative Executive Officer of Hitachi, Ltd. since April 1, 2014 and has been its Chief Executive Officer since April 1, 2016. Mr. Higashihara serve ...


CEO Compensation Analysis

Compensation vs Market: Toshiaki's total compensation ($USD3.41M) is above average for companies of similar size in the JP market ($USD1.80M).

Compensation vs Earnings: Toshiaki's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Hiroaki Nakanishi
Executive Chairman5.92yrsJP¥282.00m0.0073% ¥229.8m
Toshiaki Higashihara
Representative Executive Officer3.92yrsJP¥368.00m0.0072% ¥227.2m
Mitsuaki Nishiyama
Representative Executive Officer3.92yrsJP¥113.00m0.0018% ¥55.9m
Hidenobu Nakahata
Repre. Exec. Officerno dataJP¥106.00m0.0021% ¥66.3m
Yoshitaka Tsuda
Rep. Executive Officer5.92yrsJP¥115.00m0.0028% ¥87.4m
Hideaki Takahashi
Rep. Executive Officer8.92yrsJP¥123.00m0.0027% ¥84.9m
Keiji Kojima
Representative Executive Officer7.92yrsJP¥138.00m0.0028% ¥87.1m
Keiichi Shiotsuka
Rep. Exec. Officer6.92yrsJP¥168.00m0.0027% ¥85.2m
Kenichi Kokubo
Senior VP & Executive Officer1.92yrsJP¥122.00m0.0018% ¥57.8m
Alistair Dormer
Representative Executive Officer & Executive VP4.92yrsJP¥332.00m0.00011% ¥3.5m

5.9yrs

Average Tenure

64yo

Average Age

Experienced Management: 6501's management team is seasoned and experienced (5.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Hiroaki Nakanishi
Executive Chairman5.92yrsJP¥282.00m0.0073% ¥229.8m
Toshiaki Higashihara
Representative Executive Officer3.92yrsJP¥368.00m0.0072% ¥227.2m
Shutoku Watanabe
President of New Consumer Business Group Company and Director of New Consumer Business Group Company10.67yrsno datano data
George Buckley
Outside Director7.75yrsno data0.00055% ¥17.3m
Takashi Kawamura
Chairman Emeritus5.75yrsJP¥134.00mno data
Cynthia Carroll
Outside Director6.75yrsno data0.00010% ¥3.1m
Toyoaki Nakamura
Director3.75yrsno data0.0017% ¥52.8m
Hiroaki Yoshihara
Outside Director5.75yrsno data0.00019% ¥6.0m
Adele Pentland
Outside Director4.75yrsno data0.000070% ¥2.2m
Harufumi Mochizuki
Outside Director7.75yrsno data0.00030% ¥9.4m

5.8yrs

Average Tenure

67yo

Average Age

Experienced Board: 6501's board of directors are considered experienced (5.8 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

Hitachi, Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hitachi, Ltd.
  • Ticker: 6501
  • Exchange: TSE
  • Founded: 1910
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: JP¥3.143t
  • Shares outstanding: 966.22m
  • Website: https://www.hitachi.co.jp/

Number of Employees


Location

  • Hitachi, Ltd.
  • 6-6, Marunouchi 1-chome
  • Chiyoda-ku
  • Tokyo
  • 100-8280
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HTHI.YOTCPK (Pink Sheets LLC)ADR 2 COMUSUSDDec 1972
HTHI.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1975
6501TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1975
HIA1DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1975

Biography

Hitachi, Ltd. provides information technology, energy, industry, mobility, and smart life solutions in Japan and internationally. The company offers systems integration, consulting, and cloud services, as well as servers, storage products, software, telecommunications and network equipment, and ATMs; industrial machinery and plants, elevators, escalators, and railway systems; thermal, nuclear, and renewable energy power generation systems; and transmission and distribution systems. It also provides semiconductor processing equipment, test and measurement equipment, industrial products, and medical electronics equipment; and semiconductor and display related materials, circuit boards and materials, automotive parts, energy storage devices, specialty steel products, magnetic materials and applications, and functional components and equipment, as well as wires, cables, and related products. In addition, the company offers hydraulic excavators, wheel loaders, and mining machinery; and engine and electric powertrain systems, and integrated vehicle control systems. Further, it provides air-conditioning equipment, room air conditioners, refrigerators, and washing machines. Hitachi, Ltd. has a collaboration with Centre Leon Berard and Renesas Electronics Corporation. The company was founded in 1910 and is headquartered in Tokyo, Japan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 14:59
End of Day Share Price2020/03/27 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.