In this article, we discuss the 10 best Japanese stocks to buy right now. If you want to skip our detailed analysis of the Japanese economy and these stocks, go directly to the 5 Best Japanese Stocks to Buy Right Now.
Originating from the third largest economy in the world, Japanese companies are some of the leading contributors to world GDP. Even though the COVID-19 pandemic slowed the economic momentum of an export-reliant Japan due to broken global supply chains, the Japanese stocks are slowly recovering after the impressive vaccine rollout in Japan and other major countries.
The COVID-19 pressures delayed Japan’s economic recovery even heading into Q3 2021, but as of November this year, Japan’s vaccination rates have reached 75% of the population, and all restrictions on the economy have finally been lifted, which means that better days are ahead for Japanese companies, at least in the short-term.
Japan’s Economic Outlook
The Q3 annualized GDP for Japan fell by 3%, as compared to a forecasted decline of 0.8%. Consumption fell 1.1% in July-September, and domestic demand was responsible for a 0.9% drop in GDP. In the current quarter, consumer activity is picking up, and auto output is improving, so analysts expect Japan’s economy to expand an annualized 5.1%.
The Japanese government has planned to implement a stimulus package worth trillions of yens, prioritizing the chip industry and the country’s digital growth, yet market researchers believe that the package will help in the medium- to long-term, rather than relieve immediate economic pressure.
Japan lost 2.1% of its exports in July-September as trade was impacted by chip shortages and supply chain constraints. Real GDP is not expected to reach pre-pandemic levels until the second half of 2023, and the stimulus package will result in a 1% to 2% growth in the Japanese economy after Q2 2022, since exports remain uncertain.
Japanese analysts expect exports to recover largely by the first three months into 2022, and the auto industry is set for recovery since chip manufacturers have expanded production, supply chains are slowly regaining pre-pandemic momentum, and foot traffic has nearly returned to 2019 levels. It is high time to keep an eye out for Japanese stocks, which are surely recovering yet current valuation might offer attractive entry points into these multinational corporations.
The most notable Japanese stocks according to our extensive research include Panasonic Corporation (OTC:PCRFY), Honda Motor Co., Ltd. (NYSE:HMC), Sony Group Corporation (NYSE:SONY), and Toyota Motor Corporation (NYSE:TM), among others discussed in detail below.
Photo by Lenny Kuhne on Unsplash
Our Methodology
With this context in mind, we selected the top Japanese stocks based on mostly positive news surrounding each company, determining their caliber according to analyst ratings, earnings for the period ending September 2021 and long-term growth catalysts. These Japanese stocks are ranked according to their market capitalization.
Best Japanese Stocks to Buy Right Now
10. Nissan Motor Co., Ltd. (OTC:NSANY)
Number of Hedge Fund Holders: N/A
Market Capitalization as of December 1: $19.27 billion
Nissan Motor Co., Ltd. (OTC:NSANY) is a Yokohama-based multinational automobile manufacturer that owns three vehicle brands, namely Nissan, Infiniti, and Datsun. Nissan Motor Co., Ltd. (OTC:NSANY), via the Renault-Nissan-Mitsubishi alliance, is one of the largest automakers in the world, and is competing directly with Tesla, Inc. (NASDAQ:TSLA) on the electric vehicles front, with Nissan LEAF being its top-selling EV. As of December 1, the automaker had a market cap of $19.27 billion.
Goldman Sachs analyst Kota Yuzawa on November 18 upgraded Nissan Motor Co., Ltd. (OTC:NSANY) to Buy from Neutral with a price target of 820 yen, up from 620 yen, which reflects a 31% upside. The analyst stated that Q2 results suggested a “substantial improvement” in the breakeven volume and Nissan Motor Co., Ltd. (OTC:NSANY)’s earnings will likely improve as the company catches up to production early next year.
Nissan Motor Co., Ltd. (OTC:NSANY) announced earnings for the first half of fiscal year 2021, ending March 31 2022. The company reported a net revenue for the period amounting to 3,947 billion yen, and the net income attributable to common shareholders totaled 168.6 billion yen.
Nissan Motor Co., Ltd. (OTC:NSANY) is planning to invest $17.6 billion over the next five years in its EV division, and will introduce 15 new EV models by FY2030. By 2030, Nissan Motor Co., Ltd. (OTC:NSANY) expects that half of its vehicles sold will be powered at least partly by batteries.
In addition to Panasonic Corporation (OTC:PCRFY), Honda Motor Co., Ltd. (NYSE:HMC), Sony Group Corporation (NYSE:SONY), and Toyota Motor Corporation (NYSE:TM), Nissan Motor Co., Ltd. (OTC:NSANY) is a notable Japanese stock.
9. Panasonic Corporation (OTC:PCRFY)
Number of Hedge Fund Holders: N/A
Market Capitalization as of December 1: $25.99 billion
Panasonic Corporation (OTC:PCRFF) is one of the key Japanese multinational conglomerates, and offers consumer electronics, rechargeable batteries, automotive and avionic systems, and industrial systems. Panasonic Corporation (OTC:PCRFF) is also actively exploring artificial intelligence, robotics, and the internet of things to offer advanced products and services, and stay on top of the competition. Mizuho analyst Yasuo Nakane upgraded Panasonic Corporation (OTC:PCRFF) on October 8 to Buy from Neutral with a 1,700 yen price target.
It was revealed in an October 1 report that Panasonic Corporation (OTC:PCRFF) would alter its corporate structure by April 2022, which would help navigate and lessen the conglomerate discount associated with the stock. Panasonic Corporation (OTC:PCRFF) is one of the best Japanese stocks to buy now, since another positive catalyst for Panasonic Corporation (OTC:PCRFF) is the upward revision of the FY2022 operating profit guidance, in light of the Q1 FY 2022 operating income outperforming expectations.
Panasonic Corporation (OTC:PCRFF) posted its financial results for September end on October 28. The GAAP EPS amounted to $0.29, beating estimates by $0.02.
8. Mitsubishi Electric Corporation (OTC:MIELY)
Number of Hedge Fund Holders: N/A
Market Capitalization as of December 1: $26.65 billion
Mitsubishi Electric Corporation (OTC:MIELY) is a Japanese multinational electronics and electrical equipment manufacturing company from Tokyo. Mitsubishi Electric Corporation (OTC:MIELY) is an integral part of the Mitsubishi Corporation (OTC:MSBHF), and offers a product portfolio including luxury home appliances, air conditioning, factory automation systems, train systems, electric motors, semiconductors, and satellites, among others.
Mitsubishi Electric Corporation (OTC:MIELY) announced a ¥14 per share interim dividend on September 22, and stated that the actual dividend will be declared at the board meeting when financial results for Q2 FY2022 will be approved.
The company reported 1H results on October 28, and the net profit came in at ¥104.8 billion, whereas revenue for the period was ¥2138.3 billion, up 12% year-over-year.
Mitsubishi Electric Corporation (OTC:MIELY) is a leading force in research and development, having won a total of 27 R&D 100 Awards from the U.S. publication R&D World, making it one of the best Japanese stocks to purchase. It was revealed on December 1 that Mitsubishi Electric Corporation (OTC:MIELY) has won another R&D 100 Award in 2021 for its low-voltage air circuit breaker, which is a switching device that protects low-voltage power-distribution systems in factories and buildings.
7. Mizuho Financial Group, Inc. (NYSE:MFG)
Number of Hedge Fund Holders: 6
Market Capitalization as of December 1: $31.75 billion
Mizuho Financial Group, Inc. (NYSE:MFG) is a Tokyo-based bank holding company operating via its primary subsidiary, Mizuho Bank. The financial services offered by Mizuho Financial Group, Inc. (NYSE:MFG) include consumer banking, corporate banking, investment banking, global wealth management, financial analysis, and private equity.
As the economy recovers from the COVID-19 pandemic, Mizuho Financial Group, Inc. (NYSE:MFG), which is one of the largest Japanese lenders, reported that earnings rose 79% to 385.7 billion yen, making Mizuho Financial Group, Inc. (NYSE:MFG) one of the best Japanese stocks according to our research.
The Q2 2022 earnings were announced on November 12 by Mizuho Financial Group, Inc. (NYSE:MFG), with the GAAP EPS amounting to $0.09, beating estimates by $0.01. The $5.11 billion revenue outperformed estimated revenue by $336.76 million.
Jim Simons’ Renaissance Technologies is the largest stakeholder of Mizuho Financial Group, Inc. (NYSE:MFG), holding 2.87 million shares worth $8.15 million. Overall, 6 hedge funds in the Q3 database of Insider Monkey reported owning stakes in Mizuho Financial Group, Inc. (NYSE:MFG), amounting to $13.1 million.
6. Mitsubishi Corporation (OTC:MSBHF)
Number of Hedge Fund Holders: N/A
Market Capitalization as of December 1: $44.43 billion
Mitsubishi Corporation (OTC:MSBHF) is the largest trading Japanese company, and operates in multiple sectors via its subsidiaries, including finance, banking, energy, machinery, chemicals, and food. Mizuho analyst Kanako Mizuno upgraded Mitsubishi Corporation (OTC:MSBHF) to Buy from Neutral with a 4,200 yen price target on September 8.
Mitsubishi Corporation (OTC:MSBHF)’s consolidated forecasts for the year ending March 2022 reflect that profit attributable to common shareholders will be 380 billion yen, gaining 120.2% year-over-year. An annual cash dividend of 142 yen per share is also forecasted for the period.
Mitsubishi Corporation (OTC:MSBHF), as one of the largest Japanese companies, is playing its role in revolutionizing the country’s shift to EVs. It was reported on November 27 that Mitsubishi Corporation (OTC:MSBHF) will partner with the UK energy management solutions firm, Kaluza, and use the synergies created from Kaluza’s intelligent energy platform and Mitsubishi Corporation (OTC:MSBHF)’s industry experience to support utilities, auto manufacturers, and consumers in the shift to EVs in Japan.
In addition to Panasonic Corporation (OTC:PCRFY), Honda Motor Co., Ltd. (NYSE:HMC), Sony Group Corporation (NYSE:SONY), and Toyota Motor Corporation (NYSE:TM), Mitsubishi Corporation (OTC:MSBHF) is a notable Japanese stock.
Click to continue reading and see 5 Best Japanese Stocks To Buy Right Now.
Suggested articles:
- 10 Best Growth Stocks for 2022
- 10 Online Education Stocks to Buy
- 10 Infrastructure Stocks to Buy Under $10
Disclosure: None. 11 Best Japanese Stocks To Buy Right Now is originally published on Insider Monkey.
