Canon Marketing Japan Inc.’s (TSE:8060) Stock Is Going Strong: Is the Market Following Fundamentals?

Canon Marketing Japan’s (TSE:8060) stock is up by a considerable 10% over the past month. Since the market usually pay for a company’s long-term fundamentals, we decided to study the company’s key performance indicators to see if they could be influencing the market. Particularly, we will be paying attention to Canon Marketing Japan’s ROE today.

Return on equity or ROE is a key measure used to assess how efficiently a company’s management is utilizing the company’s capital. Put another way, it reveals the company’s success at turning shareholder investments into profits.

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How Is ROE Calculated?

ROE can be calculated by using the formula:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity

So, based on the above formula, the ROE for Canon Marketing Japan is:

10% = JP¥39b ÷ JP¥382b (Based on the trailing twelve months to March 2025).

The ‘return’ refers to a company’s earnings over the last year. Another way to think of that is that for every ¥1 worth of equity, the company was able to earn ¥0.10 in profit.

View our latest analysis for Canon Marketing Japan

What Has ROE Got To Do With Earnings Growth?

We have already established that ROE serves as an efficient profit-generating gauge for a company’s future earnings. Depending on how much of these profits the company reinvests or “retains”, and how effectively it does so, we are then able to assess a company’s earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.

A Side By Side comparison of Canon Marketing Japan’s Earnings Growth And 10% ROE

To begin with, Canon Marketing Japan seems to have a respectable ROE. And on comparing with the industry, we found that the the average industry ROE is similar at 8.4%. Consequently, this likely laid the ground for the decent growth of 12% seen over the past five years by Canon Marketing Japan.

We then performed a comparison between Canon Marketing Japan’s net income growth with the industry, which revealed that the company’s growth is similar to the average industry growth of 15% in the same 5-year period.

TSE:8060 Past Earnings Growth May 8th 2025

Earnings growth is an important metric to consider when valuing a stock. It’s important for an investor to know whether the market has priced in the company’s expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. Is 8060 fairly valued? This infographic on the company’s intrinsic value has everything you need to know.

Is Canon Marketing Japan Efficiently Re-investing Its Profits?

With a three-year median payout ratio of 37% (implying that the company retains 63% of its profits), it seems that Canon Marketing Japan is reinvesting efficiently in a way that it sees respectable amount growth in its earnings and pays a dividend that’s well covered.

Besides, Canon Marketing Japan has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders.

Conclusion

Overall, we are quite pleased with Canon Marketing Japan’s performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. Having said that, the company’s earnings growth is expected to slow down, as forecasted in the current analyst estimates. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.

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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.