OTCPK:TOPC.F

Stock Analysis Report

Executive Summary

Topcon Corporation, together with its subsidiaries, develops, manufactures, and sells positioning, eye care, and smart infrastructure products worldwide.

Rewards

Earnings are forecast to grow 15.03% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Excellent balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

3.0%

TOPC.F

0.8%

US Electronic

0.7%

US Market


1 Year Return

-8.3%

TOPC.F

22.9%

US Electronic

18.2%

US Market

Return vs Industry: TOPC.F underperformed the US Electronic industry which returned 22.9% over the past year.

Return vs Market: TOPC.F underperformed the US Market which returned 18.2% over the past year.


Shareholder returns

TOPC.FIndustryMarket
7 Day3.0%0.8%0.7%
30 Day-1.3%-0.5%1.5%
90 Day-0.3%7.5%5.0%
1 Year-8.3%-8.3%24.2%22.9%20.8%18.2%
3 Year-11.0%-11.0%45.0%41.0%45.2%35.8%
5 Year-37.4%-37.4%84.9%75.9%71.6%52.7%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

28.91x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TOPC.F ($13.35) is trading above our estimate of fair value ($3.66)

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


Price To Earnings Ratio

PE vs Industry: TOPC.F is poor value based on its PE Ratio (28.9x) compared to the Electronic industry average (20.8x).

PE vs Market: TOPC.F is poor value based on its PE Ratio (28.9x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: TOPC.F is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: TOPC.F is overvalued based on its PB Ratio (2.3x) compared to the US Electronic industry average (2.1x).


Next Steps

Future Growth

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

15.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TOPC.F's forecast earnings growth (15% per year) is above the savings rate (1.7%).

Earnings vs Market: TOPC.F's earnings (15% per year) are forecast to grow faster than the US market (14.2% per year).

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

Revenue vs Market: TOPC.F's revenue (6.3% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: TOPC.F's revenue (6.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TOPC.F's Return on Equity is forecast to be low in 3 years time (10.3%).


Next Steps

Past Performance

How has Topcon performed over the past 5 years?

-5.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TOPC.F has a large one-off loss of ¥4.8B impacting its September 30 2019 financial results.

Growing Profit Margin: TOPC.F's current net profit margins (3.6%) are lower than last year (4.3%).


Past Earnings Growth Analysis

Earnings Trend: TOPC.F's earnings have declined by -5.2% per year over the past 5 years.

Accelerating Growth: TOPC.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: TOPC.F had negative earnings growth (-16%) over the past year, making it difficult to compare to the Electronic industry average (53.7%).


Return on Equity

High ROE: TOPC.F's Return on Equity (6.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Topcon's financial position?


Financial Position Analysis

Short Term Liabilities: TOPC.F's short term assets (¥90.3B) exceed its short term liabilities (¥56.0B).

Long Term Liabilities: TOPC.F's short term assets (¥90.3B) exceed its long term liabilities (¥29.5B).


Debt to Equity History and Analysis

Debt Level: TOPC.F's debt to equity ratio (64.3%) is considered high.

Reducing Debt: TOPC.F's debt to equity ratio has reduced from 70.6% to 64.3% over the past 5 years.

Debt Coverage: TOPC.F's debt is well covered by operating cash flow (27.4%).

Interest Coverage: TOPC.F's interest payments on its debt are well covered by EBIT (16.6x coverage).


Balance Sheet

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

Debt Coverage by Assets: TOPC.F's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

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

1.94%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Years2.3%

Current dividend yield vs market & industry

Notable Dividend: TOPC.F's dividend (1.94%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: TOPC.F's dividend (1.94%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52%), TOPC.F's dividend payments are 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 Topcon's salary, the management and board of directors tenure and is there insider trading?

5.7yrs

Average management tenure


CEO

Satoshi Hirano (62yo)

6.5yrs

Tenure

0

Mr. Satoshi Hirano has been Chief Executive Officer and President of Topcon Corporation since June 2013. Mr. Hirano served as Senior Manager of General Sales Department and Executive Officer of Topcon Corp ...


Management Age and Tenure

5.7yrs

Average Tenure

59yo

Average Age

Experienced Management: TOPC.F's management team is seasoned and experienced (5.7 years average tenure).


Board Age and Tenure

5.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: TOPC.F's board of directors are considered experienced (5.5 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

  • Makoto Iwasaki (64yo)

    Sr. Managing Exec. Officer

    • Tenure: 5.5yrs
  • Ray O'Connor

    Senior Managing Executive Officer & GM of Positioning Company

    • Tenure: 7.5yrs
  • Ivan Di Federico

    Executive Officer & Chief Strategy Officer of Topcon Positioning Systems

    • Tenure: 0yrs
  • Satoshi Hirano (62yo)

    President

    • Tenure: 6.5yrs
  • Takashi Eto (59yo)

    Managing Executive Officer

    • Tenure: 4.5yrs
  • Haruhiko Akiyama (56yo)

    Senior Executive Officer

    • Tenure: 4.5yrs
  • Takayuki Yamazaki (53yo)

    Senior Executive Officer

    • Tenure: 3.5yrs
  • Masami Tsukada

    Senior Executive Officer & GM of Manufacturing Division

    • Tenure: 0.9yrs
  • Takaaki Hirayama

    Executive Officer & GM of Corporate Communication Div.

    • Tenure: 0yrs
  • Reiko Watanabe

    Executive Officer & Vice GM of General Administration & Legal Div & In Charge of Human Resources

    • Tenure: 0yrs

Board Members

  • Tatsuya Kuroyanagi (63yo)

    Outside Corporate Auditor

    • Tenure: 8.5yrs
  • Kazuyuki Matsumoto (74yo)

    Outside Director

    • Tenure: 6.5yrs
  • Makoto Iwasaki (64yo)

    Sr. Managing Exec. Officer

    • Tenure: 5.5yrs
  • Akira Sudo (68yo)

    Outside Director

    • Tenure: 5.5yrs
  • Satoshi Hirano (62yo)

    President

    • Tenure: 6.5yrs
  • Yasufumi Fukuma (61yo)

    Managing Executive Officer

    • Tenure: 6.5yrs
  • Takashi Eto (59yo)

    Managing Executive Officer

    • Tenure: 4.5yrs
  • Haruhiko Akiyama (56yo)

    Senior Executive Officer

    • Tenure: 4.5yrs
  • Takayuki Yamazaki (53yo)

    Senior Executive Officer

    • Tenure: 3.5yrs
  • Naoko Yamazaki (49yo)

    Outside Director

    • Tenure: 1.5yrs

Company Information

Topcon Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Topcon Corporation
  • Ticker: TOPC.F
  • Exchange: OTCPK
  • Founded: 1932
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: JP¥152.064b
  • Listing Market Cap: JP¥1.400b
  • Shares outstanding: 105.16m
  • Website: https://www.topcon.co.jp

Number of Employees


Location

  • Topcon Corporation
  • 75-1, Hasunuma-cho
  • Itabashi-ku
  • Tokyo
  • 174-8580
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
7732TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1992
TOPC.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1992

Biography

Topcon Corporation, together with its subsidiaries, develops, manufactures, and sells positioning, eye care, and smart infrastructure products worldwide. Its positioning products include GNSS receivers, GI ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 00:04
End of Day Share Price2019/12/09 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.