10 Best Japanese Stocks To Buy Now

07. Honda Motor Co., Ltd. (NYSE:HMC)

Number of Hedge Fund Holders: 12

Honda Motor Co., Ltd. (NYSE:HMC) is a well-established Japanese company that has made significant strides in the global automotive and motorcycle markets. With a presence in various sectors including automobiles, motorcycles, and power products, Honda Motor Co., Ltd. (NYSE:HMC) is a key player among Japanese stocks, making it an essential inclusion in the list of ten best Japanese stocks to buy now. The company’s performance in FY 2024 and its future outlook, as revealed in the latest earnings call, highlights its solid fundamentals and growth potential.

Honda Motor Co., Ltd. (NYSE:HMC) posted record-breaking financial results in FY 2024, with an operating profit reaching JPY 1.3819 trillion, a year-over-year increase of JPY 601.2 billion. This represents the highest operating profit in the company’s history, a clear indication of Honda’s strong business performance. The company’s operating profit margin stood at 6.8%, and it aims to increase this to 7% in FY 2025, showing a strategic focus on enhancing profitability. The increase in cash flows from operating activities, which amounted to JPY 3 trillion, demonstrates the company’s ability to generate liquidity, ensuring the necessary capital for future investments in electrification and business expansion.

Honda Motor Co., Ltd. (NYSE:HMC) commitment to shareholder returns is another key strength. In FY 2024, dividends rose to JPY 68 per share, a 70% increase from the previous year, and the company plans to buy back JPY 300 billion worth of shares in FY 2025. These moves reflect Honda’s strong capital allocation strategy and its focus on rewarding investors.

In terms of its business segments, Honda Motor Co., Ltd. (NYSE:HMC) motorcycle division reported a record-high operating profit of JPY 556.2 billion. The automobile business also saw improvement, with an operating profit of JPY 560.6 billion, driven by enhanced cost efficiency and product appeal. Despite challenges in some regions, Honda has been able to maintain its market position and expand its product lineup globally, particularly in Asia, North America, and Europe.

Honda Motor Co., Ltd. (NYSE:HMC) strategic focus on electrification, bolstered by its ongoing investments in battery EVs, positions it well for future growth, especially in the rapidly evolving electric vehicle market. This combination of strong financials, shareholder returns, and a forward-looking strategy makes Honda Motor Co., Ltd. (NYSE:HMC) a compelling Japanese stock for investors seeking growth and stability.