Mitsubishi HC Capital (8593)

Japan’s Largest Leasing Company with a Globally Diversified Business Model and 27 Consecutive Years of Dividend Growth

① Company Overview for Global Investors

Mitsubishi HC Capital (8593) is one of Japan’s largest comprehensive leasing and financial services companies, integrating leasing, finance, and infrastructure investment.

The company was established in 2021 through the merger of:

• Mitsubishi UFJ Lease
• Hitachi Capital

Today, it operates with one of the largest asset bases and strongest earnings power in Japan’s leasing industry.

Its main business areas include:

• Corporate equipment leasing
• Aircraft leasing
• Renewable energy investment
• Medical, logistics, and infrastructure finance
• Overseas financial services

In Japan, leasing companies are not merely rental businesses. They function as part of the country’s financial infrastructure, providing long-term capital to support corporate investment.
Mitsubishi HC Capital stands at the very top of this industry.

② Financial Strength of Its Mega-Bank Group

One of Mitsubishi HC Capital’s greatest strengths is its strong relationship with Mitsubishi UFJ Financial Group (MUFG), Japan’s largest financial group.

MUFG is a global mega-bank that operates:

• Commercial banking
• Investment banking
• Securities and trust banking

across Japan, Asia, Europe, and the United States. It holds one of the largest balance sheets and strongest funding capabilities in the global financial system.

Thanks to this group backing, Mitsubishi HC Capital enjoys:

• Exceptionally low-cost and stable funding
• Top-tier domestic credit ratings
• Resilient access to capital even during financial crises

As a result, the company’s financial stability ranks among the highest in Japan’s financial sector.

③ Earnings Stability

— Scale Leadership and a Highly Diversified Portfolio

Mitsubishi HC Capital’s defining feature is its extremely diversified earnings structure across leasing, finance, energy, aviation, and real estate-related assets.

Revenue and Profit Growth

Over the past decade, consolidated revenue has expanded by approximately 2.9 times (from 2014 to 2025).
In fiscal 2025 (ending March 2025), the company recorded:

• Revenue: 2.09 trillion JPY
• Operating profit: 187 billion JPY

both reaching record-high levels.

The operating margin has remained consistently stable at around 7–9%, demonstrating that the company has successfully achieved both scale expansion and stable profitability.

Key earnings pillars include:

• Aircraft leasing
• Renewable energy investments
• Medical, logistics, and infrastructure finance

These businesses are characterized by long-term assets with low sensitivity to economic cycles, forming the foundation of the company’s exceptional earnings stability.

④ Financial Soundness

— Conservative Capital Management with an Equity Ratio of Around 15%

Due to the asset-heavy nature of the leasing business, equity ratios tend to appear lower than in other industries.
Even within this context, Mitsubishi HC Capital is regarded as a company with one of the strongest financial structures and risk management capabilities in the industry.

Cash Flow Structure

As leasing assets continue to expand, operating cash flow remains structurally negative.
In fiscal 2025, operating cash flow was −296.8 billion JPY.

This does not indicate financial weakness. Instead, it reflects:

• Aggressive investment into income-generating lease assets
• Accumulation of future interest income streams

This is a typical “growth-oriented cash flow structure” inherent to the leasing business.

Equity Ratio Trend

• 2014: 11.4%
• 2025: 15.2%

Even while expanding its asset base, the company has steadily increased its equity ratio, demonstrating highly conservative and disciplined financial management.

Its credit ratings remain at the top level among Japanese leasing companies:

• R&I: A+
• JCR: A

⑤ Dividend Sustainability

— Stable Dividends and a Consistent Growth Track Record

Mitsubishi HC Capital has maintained stable dividends without cuts since its days as Mitsubishi UFJ Lease.

Dividend Growth Record

• 2014: 8 JPY per share
• 2025 (forecast): 40 JPY per share

This represents an increase of approximately five times over 11 years.
Dividend growth has continued steadily even after the corporate merger.

Dividend Policy

Under its medium-term management plan, the company explicitly states:

• “Stable and continuous shareholder returns”
• A target payout ratio of 40% or higher

Recent dividend performance:

• FY2024 dividend: 37 JPY (payout ratio approx. 41%)
• FY2025 forecast dividend: 40 JPY

Even at this level, the company maintains ample financial and cash flow capacity, suggesting that stable dividend growth remains highly sustainable.

⑥ Valuation and Investment Perspective

— A Rare Combination of High Yield, Low Valuation, and Stability

At a share price of around 950 JPY and a forecast dividend of 40 JPY, the dividend yield is approximately 4.2%.

Current Valuation Metrics

• PER: approximately 9x
• PBR: approximately 0.7x
• Dividend yield: over 4%

Considering its earnings power, financial strength, and stability, the stock appears to be one of the most undervalued high-dividend stocks in the Japanese market.

Compared with ORIX (PER around 10x and yield around 3.3%), Mitsubishi HC Capital offers both a higher yield and a lower valuation.

Attractive Entry Price Range

Based on a target yield of 4.5%, a reasonable long-term entry price is around 888 JPY.

• Below 900 JPY: highly attractive for long-term investors
• Strong downside support provided by its dividend yield

This is a stock that becomes more attractive as prices fall, thanks to its income-driven valuation floor.

⑦ Investor Profile — Who Is This Stock Suitable For?

Mitsubishi HC Capital is particularly well suited for investors who:

• Seek stable dividend income
• Want to minimize volatility and downside risk
• Prefer long-term income accumulation over short-term capital gains

It is especially appropriate as a core holding in retirement-oriented income portfolios.

⑧ Key Risks

The main risks to monitor include:

• Rising funding costs due to higher interest rates
• Currency exposure in overseas leasing (aircraft and vessels)
• Credit risk during global economic downturns

However, these risks are mitigated by:

• Extremely diversified business segments
• Backing from Japan’s largest financial group
• A revenue base dominated by long-term contracts

Therefore, the probability of a severe, sudden deterioration in financial performance remains low.

⑨ Final Conclusion

— A Blue-Chip Income Stock with a 4%+ Yield and Exceptional Stability

Mitsubishi HC Capital (8593) combines:

• Massive scale following its corporate integration
• Record-high earnings and dividends
• Strong positions in leasing, infrastructure, and renewable energy
• A rare mix of high yield, low PBR, and conservative financial management

These characteristics make it one of the most reliable long-term income stocks in the Japanese equity market.

At prices below 900 JPY, the stock becomes an especially compelling opportunity for investors seeking to build wealth steadily through dividends while controlling risk.

DividendDan | Japan Stocks

Independent Research on Japanese Dividend Stocks

Hi, I'm DividendDan, a Tokyo-based individual investor focused on researching Japanese dividend and value stocks. I share market insights based on publicly available data, personal research, and long-term investment perspectives to help global investors better understand the Japanese stock market. All information provided on this site is for educational purposes only and should not be considered financial advice.