It hasn't been a great afternoon session for Mitsubishi UFJ Financial investors, who have watched their shares sink by -3.5% to a price of $8.46. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Mitsubishi UFJ Financial Has Attractive P/B and P/E Ratios:
Mitsubishi UFJ Financial Group, Inc. operates as the bank holding company for MUFG Bank, Ltd. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 12.38 and an average price to book (P/B) ratio of 1.58. In contrast, Mitsubishi UFJ Financial has a trailing 12 month P/E ratio of 8.1 and a P/B ratio of 0.01.
Mitsubishi UFJ Financial's PEG ratio is 1.52, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $1,818,898 | $2,020,511 | $2,020,511 | $1,486,883 | $1,823,406 | $4,611,410 |
| Revenue Growth | n/a | 11.08% | 0.0% | -26.41% | 22.63% | 152.9% |
| Interest Income (MM) | $1,133,053 | $1,137,753 | $1,137,753 | $1,030,417 | $1,166,734 | $2,389,414 |
| Operating Margins | 56% | 41% | 56% | 77% | 57% | 34% |
| Net Margins | 43% | 31% | 39% | 52% | 42% | 14% |
| Net Income (MM) | $790,704 | $617,321 | $780,005 | $780,005 | $756,833 | $630,321 |
| Depreciation & Amort. (MM) | $163,037 | $177,143 | $177,143 | $170,033 | $170,033 | $348,173 |
| Earnings Per Share | $59.05 | $47.54 | $60.28 | $60.28 | $57.19 | $48.39 |
| EPS Growth | n/a | -19.49% | 26.8% | 0.0% | -5.13% | -15.39% |
| Diluted Shares (MM) | 13,357 | 13,124 | 12,939 | 12,856 | 12,852 | 12,501 |
| Free Cash Flow (MM) | -$798,763 | -$729,816 | $1,047,575 | $1,046,187 | $429,876 | $1,989,769 |
| Capital Expenditures (MM) | $72,807 | $60,694 | $51,085 | $52,473 | $52,473 | $116,367 |
| Current Ratio | 31.12 | 25.28 | 28.34 | 31.0 | 33.79 | 37.03 |
| Total Debt (MM) | $71,072,357 | $76,241,118 | $112,051,994 | $117,855,011 | $130,240,397 | $119,941,366 |
Mitsubishi UFJ Financial has growing revenues and increasing reinvestment in the business, decent net margins with a negative growth trend, and irregular cash flows. However, the firm suffers from declining EPS growth and a highly leveraged balance sheet.
