My journey with NTT 日本電信電話 finally begins 10th March!

  That is the day payment will be due for the shares bought today from ¥146.3 up to ¥146.8. Its 1987 IPO zenith was ¥311 [unadjusted =  ¥3,180,000] when it was a dreamy stock whose market cap exceeded that of Germany & Hong Kong combined & IPO-ed at ¥1,200,000 with a P/B of 5.4 & a PE of 126! 

       

   At the current price, PE is 11 & P/B is around 1.2 with dividend yield of 3.5% compared with just 0.4% back in 1987! Revenue has more than doubled,+150%, since that bubbly debut 38 years ago, to a record  ¥13.374569 trillion while capital adequacy is about 3 points lower at 33.2. Total assets have swelled to over  ¥30 trillion from ¥10.67 trillion at the zenith of the bubble in Jan '90 when the price had already deflated 54% from the Apr '87 apex, slightly above the current price as it turns out!  With both commissions factored in, I have to sell at over ¥155.4 to earn a capital gain, with around ¥1750 in dividends scheduled to be paid in July, covering over 1/3 of one commission.

       Comparing the dividend, EPS & book from 2013, it is trading slightly above median within a fair value band of between ¥104 up to ¥162 while market cap to revenue is almost at par. However, factoring in the increased affordability to foreign funds of such a desirable mega-cap stock due to the yen's decline from 128 at the beginning of 2023 when the current influx of Western capital following the Buffett pied piper stepped up, to the current 147, the fair value could bump up to ¥168-170.

It seems a reasonable proposition for a probable capital gain given its above average dividend yield & that it's trading slightly below the Aug & Dec 2022 low, a year before the government made noises about selling its entire remaining 32.25% stake, which will likely be executed at more bubbly prices like those in late 1987 when it was in the ¥2,500,000 range & in 2000 when it  peaked at ¥1,940,000.The company's share buybacks have lifted its holding in itself from 4.76% to 7.36% within the last 2 years while the Bank of Japan's holding is about 10%.