OTCPK:HTCM.F

Stock Analysis Report

Hitachi Construction Machinery

Executive Summary

Hitachi Construction Machinery Co., Ltd., together with its subsidiaries, manufactures, sells, services, and rents construction machinery worldwide.

Rewards

Trading at 0.2% below its fair value

Earnings are forecast to grow 6.49% per year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record



Snowflake Analysis

Good value with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0%

HTCM.F

1.1%

US Machinery

1.2%

US Market


1 Year Return

n/a

HTCM.F

19.2%

US Machinery

24.2%

US Market

Return vs Industry: Insufficient data to determine how HTCM.F performed against the US Machinery industry.

Return vs Market: Insufficient data to determine how HTCM.F performed against the US Market.


Shareholder returns

HTCM.FIndustryMarket
7 Day0%1.1%1.2%
30 Day0%1.0%3.5%
90 Dayn/a8.6%11.7%
1 Yearn/a21.4%19.2%26.9%24.2%
3 Yearn/a46.1%36.7%53.0%43.2%
5 Yearn/a77.0%55.6%75.3%56.0%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

0.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HTCM.F ($24.3) is trading below our estimate of fair value ($24.34)

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


Price To Earnings Ratio

PE vs Industry: HTCM.F is good value based on its PE Ratio (11.1x) compared to the Machinery industry average (23.4x).

PE vs Market: HTCM.F is good value based on its PE Ratio (11.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HTCM.F is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: HTCM.F is good value based on its PB Ratio (1.5x) compared to the US Machinery industry average (2.5x).


Next Steps

Future Growth

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

6.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HTCM.F's forecast earnings growth (6.5% per year) is above the savings rate (1.7%).

Earnings vs Market: HTCM.F's earnings (6.5% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: HTCM.F's revenue (2.4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: HTCM.F's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HTCM.F's Return on Equity is forecast to be low in 3 years time (11%).


Next Steps

Past Performance

How has Hitachi Construction Machinery performed over the past 5 years?

34.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HTCM.F has high quality earnings.

Growing Profit Margin: HTCM.F's current net profit margins (6.2%) are lower than last year (6.4%).


Past Earnings Growth Analysis

Earnings Trend: HTCM.F's earnings have grown significantly by 34.1% per year over the past 5 years.

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

Earnings vs Industry: HTCM.F had negative earnings growth (-1.9%) over the past year, making it difficult to compare to the Machinery industry average (9.6%).


Return on Equity

High ROE: HTCM.F's Return on Equity (12.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hitachi Construction Machinery's financial position?


Financial Position Analysis

Short Term Liabilities: HTCM.F's short term assets (¥646.9B) exceed its short term liabilities (¥454.3B).

Long Term Liabilities: HTCM.F's short term assets (¥646.9B) exceed its long term liabilities (¥210.2B).


Debt to Equity History and Analysis

Debt Level: HTCM.F's debt to equity ratio (65.3%) is considered high.

Reducing Debt: HTCM.F's debt to equity ratio has reduced from 71.2% to 65.3% over the past 5 years.

Debt Coverage: HTCM.F's debt is not well covered by operating cash flow (3.3%).

Interest Coverage: HTCM.F's interest payments on its debt are well covered by EBIT (33.6x coverage).


Balance Sheet

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

Debt Coverage by Assets: HTCM.F's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

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

3.02%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: HTCM.F's dividend (3.02%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: HTCM.F's dividend (3.02%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.1%), HTCM.F'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

What is the CEO of Hitachi Construction Machinery's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Kotaro Hirano (61yo)

0yrs

Tenure

0

Kotaro Hirano has been the Chief Executive Officer, President and Executive Officer at Hitachi Construction Machinery Co., Ltd. since April 2017. Kotaro Hirano served as Vice President, Head of SCM Transfo ...


Management Age and Tenure

2.7yrs

Average Tenure

62yo

Average Age

Experienced Management: HTCM.F's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

4.0yrs

Average Tenure

65yo

Average Age

Experienced Board: HTCM.F's board of directors are considered experienced (4 years average tenure).


Insider Trading

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.


Management Team

  • Tatsuro Ishizuka (64yo)

    Chairman & Executive Officer

    • Tenure: 2.7yrs
  • Yasushi Ochiai (63yo)

    Executive VP

    • Tenure: 3.2yrs
  • Koji Sumioka

    Chief Information Officer

    • Tenure: 4.5yrs
  • Hirotoyo Fujii (65yo)

    Senior VP

    • Tenure: 2.5yrs
  • Tadashi Motoi (62yo)

    Chief Procurement Officer

    • Tenure: 4.7yrs
  • Tetsuo Katsurayama (63yo)

    CFO, Executive Officer

    • Tenure: 4.5yrs
  • Takaharu Ikeda (61yo)

    GM of China Business Div & Exec. Officer

    • Michifumi Tabuchi (61yo)

      Chief Technical Officer

      • Kotaro Hirano (61yo)

        CEO, President

        • Sonosuke Ishii (61yo)

          Executive Officer

          • Tenure: 2.7yrs

        Board Members

        • Kazushige Okuhara (71yo)

          Outside Director

          • Tenure: 3.5yrs
        • Yutaka Saito (65yo)

          Director

          • Tenure: 2.7yrs
        • Haruyuki Toyama (60yo)

          Outside Director

          • Tenure: 4.5yrs
        • Tatsuro Ishizuka (64yo)

          Chairman & Executive Officer

          • Tenure: 2.7yrs
        • Osamu Okada (65yo)

          Director

          • Tenure: 6.5yrs
        • Koji Sumioka

          Chief Information Officer

          • Tenure: 4.5yrs
        • Hirotoyo Fujii (65yo)

          Senior VP

          • Tenure: 2.5yrs
        • Tetsuo Katsurayama (63yo)

          CFO, Executive Officer

          • Tenure: 4.5yrs
        • Kotaro Hirano (61yo)

          CEO, President

          • Junko Hirakawa (72yo)

            Outside Director

            • Tenure: 4.5yrs

          Company Information

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


          Key Information

          • Name: Hitachi Construction Machinery Co., Ltd.
          • Ticker: HTCM.F
          • Exchange: OTCPK
          • Founded: 1970
          • Industry: Construction Machinery and Heavy Trucks
          • Sector: Capital Goods
          • Market Cap: JP¥703.886b
          • Listing Market Cap: JP¥6.436b
          • Shares outstanding: 212.65m
          • Website: https://www.hitachicm.com

          Number of Employees


          Location

          • Hitachi Construction Machinery Co., Ltd.
          • 2-16-1, Higashiueno
          • Taito-ku
          • Tokyo
          • 110-0015
          • Japan

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          6305TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1992
          HTCM.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1992
          HCMDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1992
          HTCM.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

          Biography

          Hitachi Construction Machinery Co., Ltd., together with its subsidiaries, manufactures, sells, services, and rents construction machinery worldwide. The company operates in two segments, Construction Machinery Business and Solution Business. The company offers mini and medium excavators, large excavators/loading shovels, wheel loaders, demolition equipment, metal recycling equipment, forest machines, rigid dump trucks, compaction equipment, cranes and foundation machines, double-front work machines, and mine management systems, as well as various used equipment and attachments. It also provides parts, such as hydraulic oils and filters, high pressure hoses, ground engaging tools, and remanufacturing components. The company was founded in 1970 and is headquartered in Tokyo, Japan. Hitachi Construction Machinery Co., Ltd. is a subsidiary of Hitachi Ltd. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2019/12/23 23:57
          End of Day Share Price2019/09/25 00:00
          Earnings2019/09/30
          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.