MTU Fundamental Research Investment Analysis, Mitsubishi UFJ Financial Group, Inc.

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Mitsubishi UFJ Financial Group, Incorporated (MTU)

The Razor's Edge

2-Year Price History

Recent Price
(9/29/2008 4:00 PM)
$8.33
52-Week Price
$6.87 - $11.22
Market Capitalization
$95.3 Billion
Dividend Yield
0.00%
Most Recent Dividend
$0.04

MTU Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at MTU through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 3.37x and 1.90x respectively.

Utilizing this range we can see that MTU’s current Price to Sales per share ratio of 2.69x is somewhat above its historical average. As such, the current Price to Sales ratio suggests a neutral share price forecast. In order for us to become more positive about MTU we would need to see a drop in the Price to Sales ratio of 1% given current sales per share levels in order to return to its historical weighted average.

MTU Cash Earnings

Looking at MTU specifically in their Cash Earnings capabilities, Ockham views MTU as significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for MTU to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 35.45 and a 20.92 low over the same period.

Now that MTU’s current price is $9.09 and its Price to Cash Earnings ratio is 11.09, we are very positive on its outlook from the cash earnings perspective. In fact, MTU is now trading a full 61% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why MTU has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.

MTU Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for MTU to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. Because MTU is not currently paying a dividend we give them a neutral rating on the dividend portion of our analysis; however, be advised that because the company has a history of paying a dividend that means that the dividend has been discontinued. We are always cautious of a company that has discontinued paying a dividend as it generally suggests a financial weakness.

Peer Comparison

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Mitsubishi UFJ Financial Group, Inc. Industry Grouping

(9/26/2008)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding MTU) 11.53 8.58 » 28.76 2.57 1.75 » 12.13 16.68% 18.60%
*10 year range does not include current year values
Wells Fargo & Company WFC $123.5 Billion $37.31 17.52 10.77 » 27.15 2.82 2.39 » 14.44 13.48% 18.30%
Banco Santander ADS STD $101.1 Billion $16.16 6.57 7.97 » 31.46 2.10 1.15 » 8.14 22.62% 12.36%
Mitsubishi UFJ Financial Group, Inc. MTU $95.3 Billion $9.09 11.09 2.46 » 243.77 2.69 2.36 » 16.86 19.43% 10.12%
Royal Bank of Canada RY $65.9 Billion $49.26 11.01 8.42 » 16.83 1.68 0.77 » 10.80 23.96% 19.58%
Banco Bilbao Vizcaya Argentaria SA BBV $65.4 Billion $17.46 6.94 8.50 » 29.12 2.18 1.80 » 10.13 17.65% 21.16%
US Bancorp USB $63.1 Billion $36.20 15.60 7.23 » 39.25 4.09 2.64 » 17.14 5.66% 21.62%
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Mitsubishi UFJ Financial Group, Incorporated (MTU)
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Key Fundamentals

MTU - Mitsubishi UFJ Financial Group, Incorporated Fundamentals
Price (9/29/2008 4:00 PM) $8.33
Volume (9/29/2008 4:00 PM) 1.7 Million
10 Day Average Volume 4.3 Million
13 Week Price Range $6.87 - $9.67
52 Week Price Range $6.87 - $11.22
LTM Revenue $54.5 Billion
 
Shares Outstanding (03/2007) 10.5 Billion
Market Capitalization $95.3 Billion
Shares Held By Institutions 258.3 Million
Insitutional Holders 230
% Shares Held By Institutions 2.40%
Earnings Per Share (EPS) $0.25
P/E Ratio n/a
Book Value Per Share $7.13
 
Gross Margin n/a%
Quarterly Dividend 0.00
Dividend Yield 0.00%
Beta 0.86
Fiscal Year Ends March

About Mitsubishi UFJ Financial Group, Inc.

Mitsubishi UFJ Financial Group, Incorporated is considered to operate in the Financial sector. They specifically operate in the Foreign Money Center Banks business segment contained within the Banking industry.

A bank holding company, which through its subsidiaries provides commercial banking, trust banking, securities, credit cards, consumer finance, asset management, leasing and many more fields of financial services.