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Mizuho Financial Group Inc ADR MFG

Morningstar Rating
$3.49 +0.03 (0.87%)
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Company Report

Mizuho Financial Group Earnings: Guidance Hike Remains Modest, Given Risks of Yen Strengthening

We maintain our JPY 2,490 fair value estimate for no-moat Mizuho Financial Group; this is almost equal to the current share price and represents 0.66 times book value as of September. It is lower than the range of 0.8-0.9 times book where we estimate fair value for the other Japanese megabanks, reflecting Mizuho’s less ample capital cushion that limits its ability to conduct share buybacks. Mizuho’s plan to pay a JPY 100 dividend this fiscal year—raised Nov. 13 from its previous guidance of JPY 95 dividend—represents a 4.0% yield, higher than the fair dividend yields of 3.2% that we assign to Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Sumitomo Mitsui Trust. The difference is that we forecast the other banks will conduct annual share buybacks of around 1% of shares outstanding.

Price vs Fair Value

MFG is trading within a range we consider fairly valued.
Price
$3.49
Fair Value
$5.71
Uncertainty
Medium
1-Star Price
$2.22
5-Star Price
$3.49
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Mizuho has outlined aggressive cost-cutting plans that could surprise market expectations to the upside.

Bears

Mizuho's history of recurring systems troubles could prompt regulatory sanctions that hinder its ability to expand its business.

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News

Trading Information

Previous Close Price
$3.46
Day Range
$3.443.49
52-Week Range
$2.433.70
Bid/Ask
$3.35 / $3.49
Market Cap
$44.23 Bil
Volume/Avg
684,921 / 613,512

Key Statistics

Price/Earnings (Normalized)
14.69
Price/Sales
2.21
Dividend Yield
1.74%
Dividend Yield (Forward)
1.74%
Total Yield
2.45%

Company Profile

Mizuho Financial Group is roughly tied with megabank peer Sumitomo Mitsui Financial Group for the status as Japan’s second-largest bank after Mitsubishi UFJ Financial Group. As of March 2023, Mizuho’s market share of domestic loans was 6.7%, compared with 7.1% for SMFG and 8.1% for MUFG. In Japan, Mizuho has more of a corporate focus than SMFG, which has a larger retail business. Its overseas weighting is slightly smaller than that of MUFG. Unlike its two Japanese megabank peers that own foreign banks outright or hold noncontrolling stakes in local banks overseas, Mizuho expanded in recent years beyond its traditional Japanese borrowers, mainly through its core banking and securities units, focusing on the financing needs of global multinational corporations.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
64,402

Competitors

Valuation

Metric
MFG
HSBC
Price/Earnings (Normalized)
14.692.76
Price/Book Value
0.690.83
Price/Sales
2.212.22
Price/Cash Flow
4.456.58
Price/Earnings
MFG
HSBC

Financial Strength

Metric
MFG
HSBC
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
MFG
HSBC
Return on Assets (Normalized)
0.36%0.89%
Return on Equity (Normalized)
10.03%14.55%
Return on Invested Capital (Normalized)
Return on Assets
MFG
HSBC

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Economic Moat
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BBD
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DB
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