Fact based stock research
Nippon Kayaku (TSE:4272)

JP3694400007

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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.

Nippon Kayaku stock research in summary

nipponkayaku.co.jp

ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Nippon Kayaku (Specialty Chemicals, Japan) shares have much better financial characteristics than comparable stocks. Shares of Nippon Kayaku 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 73) and are safely financed (Safety Rank of 97, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Nippon Kayaku's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Nippon Kayaku 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 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 97) 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	73
Safety Rank	97
Combined Rank	85

Country	Japan
Industry	Specialty Chemicals
Index	Low Emissions, Nikkei 225
Size class	Large

This stock has achievements: Top 10 Stock.

19-Dec-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: Nippon Kayaku

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	98	39	25	43
GROWTH
GROWTH	47	49	21	73
SAFETY
SAFETY	100	96	98	97
SENTIMENT
SENTIMENT	n/a	44	28	^new
360° VIEW
360° VIEW	n/a	61	32	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Nippon Kayaku is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	98	39	25	43
GROWTH
GROWTH	47	49	21	73
SAFETY
SAFETY	100	96	98	97
COMBINED
COMBINED	100	76	40	85

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Nippon Kayaku the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Nippon Kayaku shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Nippon Kayaku. Price-to-Profit (also referred to as price-earnings, P/E) is 50 which means that the stock price compared with what market professionals expect for future profits is lower than for 50% of comparable companies, indicating a good value concerning Nippon Kayaku's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 57, which means that the stock price is lower as regards to invested capital than for 57% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 69% of alternatives (only 31% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 55% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Nippon Kayaku's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	81	37	35	31
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	91	41	19	50
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	98	78	49	57
DIVIDEND YIELD
DIVIDEND YIELD	86	46	54	45
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	98	39	25	43

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Nippon Kayaku; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Nippon Kayaku 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 all but one indicator above average for Nippon Kayaku. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Both Profit Growth, with a rank of 90, and Stock Returns, with a rank of 57, are also above average. But Capital Growth only has a rank of 49, which means that, currently, professionals expect the company to grow its invested capital less than 51% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. 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. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	32	69	33	51
PROFIT GROWTH
PROFIT GROWTH	50	29	18	90
CAPITAL GROWTH
CAPITAL GROWTH	n/a	21	28	49
STOCK RETURNS
STOCK RETURNS	56	65	69	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	47	49	21	73

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Nippon Kayaku.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 97 (better than 97% compared with alternatives) for 2024, the company Nippon Kayaku has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Nippon Kayaku 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, where all three are above average for Nippon Kayaku. Leverage is at 84, meaning the company has a below-average debt-to-equity ratio. It has less debt than 84% of its competitors. Refinancing is at a rank of 75, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. Finally, Liquidity is also good at a rank of 81, which means that the company generates more profit to service its debt than 81% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 97 (better than 97% compared with alternatives), Nippon Kayaku has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Nippon Kayaku but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	84	78	82	84
REFINANCING
REFINANCING	90	77	79	75
LIQUIDITY
LIQUIDITY	100	84	94	81
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100	96	98	97

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Nippon Kayaku 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	13	13	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	88	50	^new
MARKET PULSE
MARKET PULSE	n/a	25	29	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	44	28	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Nippon Kayaku.
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