Fact based stock research
Daiwa Securities (TSE:8601)

JP3502200003

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Daiwa Securities stock research in summary

daiwa-grp.jp

ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), Daiwa Securities (Investment Banking & Brokerage, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Daiwa Securities are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives). But they show above-average growth (Growth Rank of 63) and are safely financed (Safety Rank of 54, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on Daiwa Securities's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Daiwa Securities exhibits low value (Obermatt Value Rank of 43), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 63). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 54) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	43
Growth Rank	63
Safety Rank	54
Combined Rank	61

Country	Japan
Industry	Investment Banking & Brokerage
Index	TOPIX 100, Human Rights, Nikkei 225
Size class	X-Large

18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Daiwa Securities

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	97	75	45	43
GROWTH
GROWTH	35	29	79	63
SAFETY
SAFETY	100	69	55	54
SENTIMENT
SENTIMENT	n/a	1	16	^new
360° VIEW
360° VIEW	n/a	25	49	^new

Most recent update of the stock research: 18-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Daiwa Securities is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	97	75	45	43
GROWTH
GROWTH	35	29	79	63
SAFETY
SAFETY	100	69	55	54
COMBINED
COMBINED	100	67	76	61

Last update of combined financial performance: 18-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Daiwa Securities the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Daiwa Securities shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Daiwa Securities. Price-to-Sales (P/S) is 56, which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value concerning Daiwa Securities's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 64% of alternatives (36% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 42 are lower than average (dividends are expected to be lower than 58% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 29, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Daiwa Securities's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Daiwa Securities may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	84	70	56	56
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	97	54	27	29
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	92	86	61	64
DIVIDEND YIELD
DIVIDEND YIELD	94	59	34	42
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	97	75	45	43

Last update of Value Rank: 18-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Daiwa Securities; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Daiwa Securities shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Daiwa Securities. Profit Growth has a rank of 89, which means that currently professionals expect the company to grow its profits more than 89% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 92 (above 92% of alternative investments). But Sales Growth has a below the median rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors, and Capital Growth also has a lower rank of 36. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Daiwa Securities. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	23	34	18	10
PROFIT GROWTH
PROFIT GROWTH	20	15	86	89
CAPITAL GROWTH
CAPITAL GROWTH	n/a	35	35	36
STOCK RETURNS
STOCK RETURNS	82	85	100	92
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	35	29	79	63

Last update of Growth Rank: 18-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Daiwa Securities.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Daiwa Securities has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Daiwa Securities is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Daiwa Securities. Refinancing is at 89, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 89% of its competitors. Liquidity is also good at 65, meaning the company generates more profit to service its debt than 65% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 7, which means the company has an above-average debt-to-equity ratio. It has more debt than 93% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 54 (better than 54% compared with alternatives), Daiwa Securities has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Daiwa Securities could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Daiwa Securities and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	96	5	7	7
REFINANCING
REFINANCING	98	95	93	89
LIQUIDITY
LIQUIDITY	100	73	62	65
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100	69	55	54

Last update of Safety Rank: 18-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Daiwa Securities and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	11	3	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	26	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	12	47	^new
MARKET PULSE
MARKET PULSE	n/a	10	36	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	1	16	^new

Last update of Sentiment Rank: 18-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Daiwa Securities.
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