If you are weighing whether to hold, buy, or sell Hokkaido Electric Power Company shares, you are not alone. With the stock trading at 1,182.5 and a year-to-date gain of 42.8%, it is clear that investors are paying attention. Just in the past month, shares jumped 12.9%. Over the last five years, the company has delivered an eye-catching total return of 192.8%. Even in the past three years, the stock’s 143.1% rise stands out. Despite a slight dip of 0.3% this past week, the long-term trajectory remains noteworthy.
Much of this momentum connects back to shifts in Japan’s energy markets, including renewed investor interest in utilities and growing optimism around energy policy and sector reforms affecting companies like Hokkaido Electric Power. These elements, while sometimes subtle, have contributed to changes in how risk and growth potential are priced into the stock over recent quarters.
But does this strong price performance mean the stock is overvalued, or is there still plenty of room to run? That is where a closer look at valuation comes in. According to standardized valuation checks, Hokkaido Electric Power Company scores a 2 out of 6. This signals that, while not deeply undervalued, the company does pass a couple of the key undervaluation screens.
Let’s break down what these checks are, how they work, and what they suggest about the company’s current valuation. And by the end, I will share an even more insightful perspective for understanding what the numbers really mean for investors like you.
Hokkaido Electric Power Company scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Dividend Discount Model (DDM) is designed to value a stock based on its projected future dividends, factoring in both expected dividend growth and the level of risk. For Hokkaido Electric Power Company, recent data shows an annual dividend per share (DPS) of ¥35.36, with a return on equity (ROE) of 16.1%. The dividend payout ratio is 2.42. Expected dividend growth has been capped at 0.52% per year, which is a conservative adjustment from the company’s historically higher rates.
This model emphasizes sustainability and relies on predictable dividend payments rather than volatile earnings or market trends. Despite a solid ROE and consistent dividend history, the capped growth rate reflects analysts’ caution about how much further the payouts can realistically rise. Based on these projections, the DDM’s estimate for Hokkaido Electric Power’s intrinsic value is ¥841.84 per share.
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Compared to the current share price of ¥1,182.5, the model implies the stock is about 40.5% overvalued. This suggests that at present the market may be too optimistic about future dividend growth or payout potential relative to the company’s fundamentals.
Result: OVERVALUED
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hokkaido Electric Power Company.
9509 Discounted Cash Flow as at Sep 2025
Our Dividend Discount Model (DDM) analysis suggests Hokkaido Electric Power Company may be overvalued by 40.5%. Find undervalued stocks or create your own screener to find better value opportunities.
The price-to-earnings (PE) ratio is a widely used metric for valuing profitable companies like Hokkaido Electric Power Company. It reflects how much investors are willing to pay today for each yen of the company’s earnings. A lower PE can signal undervaluation, while a higher PE may mean the market expects more growth or views the company as less risky.
Growth expectations and risk are two major factors that influence what counts as a “normal” or “fair” PE ratio. Companies with strong growth prospects or steadier earnings streams often command higher PE ratios. Conversely, firms with stagnant earnings or higher risks tend to trade at lower multiples.
Currently, Hokkaido Electric Power Company is trading at a PE ratio of 3.89x. This is just above the peer average of 3.60x and significantly below the electric utilities industry average of 14.36x. While these benchmarks are useful, they do not capture company-specific factors beyond simple comparisons.
This is where Simply Wall St’s proprietary “Fair Ratio” metric adds value. The Fair Ratio, at 7.85x for Hokkaido Electric, takes into account not just industry standards and peer performance but also the company’s own earnings growth, profit margins, risks, and market capitalization. This holistic view means the Fair Ratio is a more tailored benchmark for whether the stock’s valuation aligns with its fundamentals.
Comparing the Fair Ratio of 7.85x with the current PE of 3.89x, it is clear the stock is trading well below what would be considered fair. This suggests the market may be undervaluing the company’s future regarding growth and profitability.
Result: UNDERVALUED
TSE:9509 PE Ratio as at Sep 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Earlier, we mentioned there is an even better way to understand what a stock is really worth. Let’s introduce you to Narratives. A Narrative is your personal story about a company’s future, where you get to shape key financial estimates like fair value, revenue growth, and profit margins. It bridges the gap between what you believe about Hokkaido Electric Power Company and what the numbers actually say, letting you create a forecast that supports your unique perspective. All of this is available within Simply Wall St’s Community page, a feature used by millions of investors.
Narratives make investing more accessible by guiding you through linking the company’s story to a financial forecast and then to an actionable fair value. They update automatically whenever new events or earnings reports are released, helping you react quickly to fresh information. Narratives empower you to make smarter decisions on buying or selling by instantly comparing your calculated Fair Value to the current Price. For example, one investor might see major policy reform as a driver of rapid future growth and set a high fair value, while another may focus on market risks and estimate a much lower value.
Do you think there’s more to the story for Hokkaido Electric Power Company? Create your own Narrative to let the Community know!
TSE:9509 Earnings & Revenue History as at Sep 2025
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.
Companies discussed in this article include 9509.
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