OTCPK:MHVY.F

Stock Analysis Report

Mitsubishi Heavy Industries

Executive Summary

Mitsubishi Heavy Industries, Ltd. manufactures and sells heavy machinery worldwide.

Rewards

Trading at 25.8% below its fair value

Earnings are forecast to grow 5.51% per year

Earnings grew by 27.5% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has Mitsubishi Heavy Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.0%

MHVY.F

0.09%

US Machinery

0.3%

US Market


1 Year Return

n/a

MHVY.F

21.3%

US Machinery

18.5%

US Market

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

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


Shareholder returns

MHVY.FIndustryMarket
7 Day-1.0%0.09%0.3%
30 Day-2.9%-1.0%1.5%
90 Dayn/a9.6%5.7%
1 Yearn/a23.6%21.3%21.1%18.5%
3 Year728.0%728.0%39.8%30.9%45.9%36.4%
5 Year565.8%565.8%69.9%49.8%71.4%52.5%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Mitsubishi Heavy Industries undervalued compared to its fair value and its price relative to the market?

25.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MHVY.F ($38.42) is trading below our estimate of fair value ($51.77)

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


Price To Earnings Ratio

PE vs Industry: MHVY.F is good value based on its PE Ratio (13.5x) compared to the Machinery industry average (22.1x).

PE vs Market: MHVY.F is good value based on its PE Ratio (13.5x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: MHVY.F is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: MHVY.F is good value based on its PB Ratio (1x) compared to the US Machinery industry average (2.5x).


Next Steps

Future Growth

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

5.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MHVY.F's forecast earnings growth (5.5% per year) is above the savings rate (1.7%).

Earnings vs Market: MHVY.F's earnings (5.5% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: MHVY.F's revenue (0.06% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: MHVY.F's revenue (0.06% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MHVY.F's Return on Equity is forecast to be low in 3 years time (8%).


Next Steps

Past Performance

How has Mitsubishi Heavy Industries performed over the past 5 years?

-5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MHVY.F has a large one-off loss of ¥48.5B impacting its September 30 2019 financial results.

Growing Profit Margin: MHVY.F's current net profit margins (2.6%) are higher than last year (2%).


Past Earnings Growth Analysis

Earnings Trend: MHVY.F's earnings have declined by -5.7% per year over the past 5 years.

Accelerating Growth: MHVY.F's earnings growth over the past year (27.5%) exceeds its 5-year average (-5.7% per year).

Earnings vs Industry: MHVY.F earnings growth over the past year (27.5%) exceeded the Machinery industry 13.5%.


Return on Equity

High ROE: MHVY.F's Return on Equity (7.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Mitsubishi Heavy Industries's financial position?


Financial Position Analysis

Short Term Liabilities: MHVY.F's short term assets (¥3,069.0B) exceed its short term liabilities (¥2,606.3B).

Long Term Liabilities: MHVY.F's short term assets (¥3,069.0B) exceed its long term liabilities (¥864.4B).


Debt to Equity History and Analysis

Debt Level: MHVY.F's debt to equity ratio (73.3%) is considered high.

Reducing Debt: MHVY.F's debt to equity ratio has increased from 51% to 73.3% over the past 5 years.

Debt Coverage: MHVY.F's debt is well covered by operating cash flow (25.3%).

Interest Coverage: MHVY.F's interest payments on its debt are well covered by EBIT (10.6x coverage).


Balance Sheet

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

Debt Coverage by Assets: MHVY.F's debt is covered by short term assets (assets are 2.4x debt).


Next Steps

Dividend

What is Mitsubishi Heavy Industries's current dividend yield, its reliability and sustainability?

3.55%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: MHVY.F's dividend (3.55%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: MHVY.F's dividend (3.55%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (44.7%), MHVY.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 Mitsubishi Heavy Industries's salary, the management and board of directors tenure and is there insider trading?

0.9yrs

Average management tenure


CEO

Seiji Izumisawa (62yo)

0.7yrs

Tenure

0

Mr. Seiji Izumisawa has been President and Chief Executive Officer of Mitsubishi Heavy Industries Ltd., since April 1, 2019 and its Chief Strategy Officer since June 2018. Mr. Izumisawa served as Executive ...


Management Age and Tenure

0.9yrs

Average Tenure

64yo

Average Age

Experienced Management: MHVY.F's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Age and Tenure

2.5yrs

Average Tenure

64yo

Average Age

Experienced Board: MHVY.F's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


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

  • Hisakazu Mizutani (68yo)

    EVP, CEO of Integrated Defense & Space Systems & President of Integrated Defense & Space Systems

    • Tenure: 6.7yrs
    • Compensation: JP¥104.00m
  • Masanori Koguchi (64yo)

    Senior EVP

    • Tenure: 4.5yrs
  • Michisuke Nayama (64yo)

    Senior EVP & Chief Technology Officer

    • Tenure: 4.7yrs
  • Seiji Izumisawa (62yo)

    President

    • Tenure: 0.7yrs
  • Yoshihiro Shiraiwa

    Senior VP and Assistant to President & CEO

    • Tenure: 0.9yrs
  • Hisayuki Fujihara

    Senior VP and Vice President of Industry & Infrastructure

    • Tenure: 0yrs
  • Keisuke Hirose

    Senior VP and Head of Commercial Aviation Systems & Head of Nagoya Aerospace Systems Works

    • Tenure: 0yrs
  • Masahiko Mishima (63yo)

    Executive VP

    • Tenure: 0.5yrs
  • Hisato Kozawa

    Senior VP

    • Tenure: 0.9yrs
  • Junichiro Kakihara

    Senior VP

    • Tenure: 0.9yrs

Board Members

  • Hiroo Unoura (70yo)

    Outside Director and Member of Audit & Supervisory Committee

    • Tenure: 0.5yrs
  • Ken Kobayashi (70yo)

    Outside Director

    • Tenure: 3.5yrs
  • Christina L. Ahmadjian (60yo)

    Outside Director and Audit & Supervisory Committee Member

    • Tenure: 7.5yrs
  • Shunichi Miyanaga (71yo)

    Chairman of the Board

    • Tenure: 0.7yrs
    • Compensation: JP¥157.00m
  • Masanori Koguchi (64yo)

    Senior EVP

    • Tenure: 4.5yrs
  • Seiji Izumisawa (62yo)

    President

    • Tenure: 0.7yrs
  • Hiroki Kato (64yo)

    Outside Director and Full-time Audit & Supervisory Committee Member

    • Tenure: 0yrs
  • Masahiko Mishima (63yo)

    Executive VP

    • Tenure: 0.5yrs
  • Naoyuki Shinohara (66yo)

    Outside Director

    • Tenure: 4.5yrs
  • Toshifumi Goto (62yo)

    Director and Full-time Audit & Supervisory Committee Member

    • Tenure: 2.5yrs

Company Information

Mitsubishi Heavy Industries, Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mitsubishi Heavy Industries, Ltd.
  • Ticker: MHVY.F
  • Exchange: OTCPK
  • Founded: 1884
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: JP¥1.418t
  • Listing Market Cap: JP¥13.026b
  • Shares outstanding: 335.93m
  • Website: https://www.mhi.com

Number of Employees


Location

  • Mitsubishi Heavy Industries, Ltd.
  • 2-3, Marunouchi 3-chome
  • Chiyoda-ku
  • Tokyo
  • 100-8332
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MHVY.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1992
7011TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1992
MIHDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1992

Biography

Mitsubishi Heavy Industries, Ltd. manufactures and sells heavy machinery worldwide. It operates through Power Systems; Industry & Infrastructure; and Aircraft, Defense & Space segments. The company offers  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 23:48
End of Day Share Price2019/12/04 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.