OTCPK:DSEC.F

Stock Analysis Report

Executive Summary

Daiwa Securities Group Inc., together with its subsidiaries, primarily operates as a securities broker-dealer in Japan and internationally.


Snowflake Analysis

Good value second-rate dividend payer.

Share Price & News

How has Daiwa Securities Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

0%

DSEC.F

10.8%

US Capital Markets

7.2%

US Market


1 Year Return

-4.9%

DSEC.F

-11.6%

US Capital Markets

-10.4%

US Market

Return vs Industry: DSEC.F exceeded the US Capital Markets industry which returned -11.6% over the past year.

Return vs Market: DSEC.F exceeded the US Market which returned -10.4% over the past year.


Shareholder returns

DSEC.FIndustryMarket
7 Day0%10.8%7.2%
30 Day0%-15.3%-12.6%
90 Dayn/a-22.1%-19.4%
1 Year-4.9%-4.9%-9.8%-11.6%-8.5%-10.4%
3 Yearn/a9.6%3.3%15.8%8.3%
5 Year-39.4%-39.4%36.3%23.5%35.8%21.0%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Daiwa Securities Group undervalued compared to its fair value and its price relative to the market?

10.81x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DSEC.F ($4.89) is trading above our estimate of fair value ($3.56)

Significantly Below Fair Value: DSEC.F is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DSEC.F is good value based on its PE Ratio (10.8x) compared to the Capital Markets industry average (33x).

PE vs Market: DSEC.F is good value based on its PE Ratio (10.8x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: DSEC.F is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: DSEC.F is good value based on its PB Ratio (0.5x) compared to the US Capital Markets industry average (7.5x).


Next Steps

Future Growth

How is Daiwa Securities Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

12.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DSEC.F's forecast earnings growth (12.1% per year) is above the savings rate (1.7%).

Earnings vs Market: DSEC.F's earnings (12.1% per year) are forecast to grow slower than the US market (12.2% per year).

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

Revenue vs Market: DSEC.F's revenue (4.2% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: DSEC.F'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: DSEC.F's Return on Equity is forecast to be low in 3 years time (7.4%).


Next Steps

Past Performance

How has Daiwa Securities Group performed over the past 5 years?

-16.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DSEC.F has a large one-off gain of ¥18.4B impacting its December 31 2019 financial results.

Growing Profit Margin: DSEC.F's current net profit margins (9%) are lower than last year (12%).


Past Earnings Growth Analysis

Earnings Trend: DSEC.F's earnings have declined by -16.3% per year over the past 5 years.

Accelerating Growth: DSEC.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: DSEC.F had negative earnings growth (-28.1%) over the past year, making it difficult to compare to the Capital Markets industry average (9.7%).


Return on Equity

High ROE: DSEC.F's Return on Equity (4.9%) is considered low.


Next Steps

Financial Health

How is Daiwa Securities Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: DSEC.F has a low level of unsold assets or inventory.

Debt Coverage by Assets: DSEC.F's debt is covered by short term assets (assets are 1.8x debt).


Financial Institutions Analysis

Asset Level: DSEC.F's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if DSEC.F has a sufficient allowance for bad loans.

Low Risk Liabilities: DSEC.F reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if DSEC.F has an acceptable proportion of non-loan assets held.

Low Risk Deposits: DSEC.F has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if DSEC.F has an appropriate level of bad loans.


Next Steps

Dividend

What is Daiwa Securities Group's current dividend yield, its reliability and sustainability?

4.60%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DSEC.F's dividend (4.6%) is higher than the bottom 25% of dividend payers in the US market (1.95%).

High Dividend: DSEC.F's dividend (4.6%) is low compared to the top 25% of dividend payers in the US market (5.4%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.8%), DSEC.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

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Seiji Nakata (59yo)

2.83s

Tenure

JP¥221,000,000

Compensation

Mr. Seiji Nakata has been the President and Chief Executive Officer of Daiwa Securities Group Inc. since April 1, 2017 and serves as its Representative Corporate Executive Officer and Head of Retail. He se ...


CEO Compensation Analysis

Compensation vs Market: Seiji's total compensation ($USD2.05M) is below average for companies of similar size in the US market ($USD7.28M).

Compensation vs Earnings: Seiji's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Takashi Hibino
Chairman of the Board & Senior Managing Officer2.83yrsJP¥195.00m0.013% ¥791.8k
Seiji Nakata
President2.83yrsJP¥221.00m0.0085% ¥518.3k
Toshihiro Matsui
COO, Dep. President3.67yrsJP¥154.00m0.0084% ¥514.7k
Koichi Matsushita
Deputy President9.17yrsJP¥113.00m0.0049% ¥301.6k
Kazuo Takahashi
Deputy President2.67yrsJP¥113.00m0.0029% ¥177.0k
Eiji Sato
Former CFO0.83yrno data0.0019% ¥116.6k
Masahisa Nakagawa
Former Deputy President0.67yrJP¥106.00m0.0038% ¥233.2k
Hidenori Yamaguchi
MD of Investor Relations Office & Head of Investor Relationsno datano datano data
Akihiko Ogino
Senior Executive Managing Directorno datano data0.0045% ¥277.2k
Kana Shirakawa
Executive MDno datano data0.0033% ¥200.9k

2.8yrs

Average Tenure

59yo

Average Age

Experienced Management: DSEC.F's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Takashi Hibino
Chairman of the Board & Senior Managing Officer2.83yrsJP¥195.00m0.013% ¥791.8k
Seiji Nakata
President2.83yrsJP¥221.00m0.0085% ¥518.3k
Toshihiro Matsui
COO, Dep. President3.67yrsJP¥154.00m0.0084% ¥514.7k
Kazuo Takahashi
Deputy President2.67yrsJP¥113.00m0.0029% ¥177.0k
Masahisa Nakagawa
Former Deputy President0.67yrJP¥106.00m0.0038% ¥233.2k
Mikita Komatsu
Former Dep. President3.67yrsno data0.0059% ¥357.8k
Keiko Tashiro
Senior Managing Executive Officer5.67yrsJP¥107.00m0.0031% ¥188.6k
Hirotaka Takeuchi
Outside Director3.83yrsno data0.00079% ¥48.2k
Tadashi Onodera
Outside Director5.67yrsno data0.00053% ¥32.4k
Shigeru Ishida
Chairman of Daiwa Securities SMBC Hong Kong Ltd and Chairman of Daiwa Securities SMBCCathay Co Ltdno datano datano data

3.7yrs

Average Tenure

59yo

Average Age

Experienced Board: DSEC.F's board of directors are considered experienced (3.7 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

Daiwa Securities Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Daiwa Securities Group Inc.
  • Ticker: DSEC.F
  • Exchange: OTCPK
  • Founded: 1902
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: JP¥659.757b
  • Listing Market Cap: JP¥6.105b
  • Shares outstanding: 1.52b
  • Website: https://www.daiwa-grp.jp

Number of Employees


Location

  • Daiwa Securities Group Inc.
  • GranTokyo North Tower
  • 9-1, Marunouchi 1-chome
  • Tokyo
  • 100-6751
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DSEC.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1992
DSEDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1992
8601TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1992
DSEE.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJan 2010

Biography

Daiwa Securities Group Inc., together with its subsidiaries, primarily operates as a securities broker-dealer in Japan and internationally. The company operates in four segments: Retail, Wholesale, Asset management, and Investment. It provides services, such as brokerage, trading, underwriting, strategic advice, product development, and structured finance. The Retail segment offers online and telephone-based securities-related services through a network of 162 branches and sales offices, as well as non-face-to-face channels comprising the Internet and call centers. The Wholesale segment provides sales and trading services of equities, bonds, foreign exchange, and derivative products to customers, including institutional investors and corporations; and underwriting services, initial public offerings, and merger and acquisition advisory services. The Asset Management segment structures and manages investment trusts primarily for individual investors and financial institutions; offers investment advisory services to pension funds and other institutional investors; and manages assets. The Investment segment is involved in loans, private equity, and energy investment activities. The company also provides research and consulting, information systems, banking, and other support services, as well as investment management, and advisory and agency services; and lends and borrows real estate properties. The company was formerly known as Daiwa Securities Co. Ltd. and changed its name to Daiwa Securities Group Inc. in 1999. Daiwa Securities Group Inc. was founded in 1902 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 Analysis2020/03/31 00:45
End of Day Share Price2020/02/21 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.