Hikari Tsushin (TSE:9435) Raises Dividend And Guidance Following Strong Earnings, But Is It Cheap

Hikari Tsushin (TSE:9435) is back in focus after its board approved a higher dividend payout and updated forecasts on August 13, 2026, alongside first quarter earnings and new full year guidance.

See our latest analysis for Hikari Tsushin.

The dividend hike and upgraded guidance have come alongside a 1 month share price return of 4.46% and a 3 month share price return of 4.57%, while the year to date share price is still down 11.52%. Over a longer horizon, total shareholder return is down 4.63% over 1 year but remains strong over 3 and 5 years at 81.95% and 132.82% respectively. This points to longer term momentum even as recent moves reflect shifting expectations after Hikari Tsushin's earnings and dividend news.

If this dividend update has you thinking about where to find other potential opportunities, it could be a good time to check out 12 top founder-led companies

After the dividend lift and guidance update, Hikari Tsushin shares have only partially recovered this year’s pullback. The key issue now is whether recent gains have already captured the value on offer or if pricing still leaves upside ahead.

Price to Earnings of 10.8x for Hikari Tsushin: Is it justified?

On the latest figures, Hikari Tsushin trades on a P/E of 10.8x, which screens as good value relative to both peers and the wider Japan market at the current share price of ¥39,330.

The P/E ratio compares what investors are paying for each unit of current earnings. For a company like Hikari Tsushin, with exposure to electricity and gas, communications, beverages, insurance, finance and solutions for small and medium sized enterprises, earnings power and consistency often matter more than headline revenue growth.

According to the statements, the 10.8x P/E is below the peer average of 13x and below the Asian Industrials industry average of 11.1x. It is also below the estimated fair P/E of 15.6x from the SWS fair ratio model, which indicates that the current market valuation is lower than the level implied by that model.

Explore the SWS fair ratio for Hikari Tsushin

Result: Price-to-Earnings of 10.8x (UNDERVALUED)

However, Hikari Tsushin still faces risks if segment earnings weaken or if the current revenue growth rate of 4.45% slows and, in turn, puts pressure on the 10.8x P/E narrative.

Find out about the key risks to this Hikari Tsushin narrative.

Another view on Hikari Tsushin’s valuation

While the current 10.8x P/E suggests Hikari Tsushin may be priced cheaply relative to peers, the SWS DCF model points in the opposite direction. At a share price of ¥39,330, the stock is above the model’s future cash flow value of ¥29,075.17, which screens as overvalued on that basis.

For readers who want to see how this picture is built line by line, Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hikari Tsushin for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 25 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

The mix of potential upside and clear risks around Hikari Tsushin will not stay under the radar for long. Use the data and sentiment tools available to form your own view quickly, starting with 3 key rewards and 3 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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