MOODY'S CORP (MCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCO - US6153691059 - Common Stock
527.27 USD
-2.97 (-0.56%)
Taking everything into account, MCO scores 5 out of 10 in our fundamental rating. MCO was compared to 238 industry peers in the Capital Markets industry. MCO scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, MCO is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- MCO had positive earnings in the past year.
- MCO had a positive operating cash flow in the past year.
- Each year in the past 5 years MCO has been profitable.
- In the past 5 years MCO always reported a positive cash flow from operatings.
1.2 Ratios
- MCO has a Return On Assets of 14.56%. This is amongst the best in the industry. MCO outperforms 94.54% of its industry peers.
- MCO's Return On Equity of 56.71% is amongst the best of the industry. MCO outperforms 98.74% of its industry peers.
- The Return On Invested Capital of MCO (20.43%) is better than 96.64% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for MCO is significantly above the industry average of 7.27%.
- The last Return On Invested Capital (20.43%) for MCO is above the 3 year average (16.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.56% | ||
| ROE | 56.71% | ||
| ROIC | 20.43% |
ROA(3y)11.28%
ROA(5y)12.65%
ROE(3y)53.57%
ROE(5y)71.04%
ROIC(3y)16.07%
ROIC(5y)17.25%
1.3 Margins
- MCO has a Profit Margin of 29.92%. This is in the better half of the industry: MCO outperforms 74.37% of its industry peers.
- MCO's Profit Margin has been stable in the last couple of years.
- Looking at the Operating Margin, with a value of 43.81%, MCO is in the better half of the industry, outperforming 78.99% of the companies in the same industry.
- In the last couple of years the Operating Margin of MCO has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 73.75%, MCO belongs to the top of the industry, outperforming 81.93% of the companies in the same industry.
- MCO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 43.81% | ||
| PM (TTM) | 29.92% | ||
| GM | 73.75% |
OM growth 3Y-2.8%
OM growth 5Y-0.46%
PM growth 3Y-6.57%
PM growth 5Y-0.28%
GM growth 3Y-0.51%
GM growth 5Y0.36%
2. Health
2.1 Basic Checks
- Compared to 1 year ago, MCO has less shares outstanding
- Compared to 5 years ago, MCO has less shares outstanding
- Compared to 1 year ago, MCO has about the same debt to assets ratio.
2.2 Solvency
- MCO has a debt to FCF ratio of 2.91. This is a good value and a sign of high solvency as MCO would need 2.91 years to pay back of all of its debts.
- MCO has a Debt to FCF ratio of 2.91. This is in the better half of the industry: MCO outperforms 79.41% of its industry peers.
- A Debt/Equity ratio of 1.76 is on the high side and indicates that MCO has dependencies on debt financing.
- The Debt to Equity ratio of MCO (1.76) is worse than 75.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 2.91 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
- A Current Ratio of 1.84 indicates that MCO should not have too much problems paying its short term obligations.
- MCO has a better Current ratio (1.84) than 72.27% of its industry peers.
- MCO has a Quick Ratio of 1.84. This is a normal value and indicates that MCO is financially healthy and should not expect problems in meeting its short term obligations.
- With a decent Quick ratio value of 1.84, MCO is doing good in the industry, outperforming 72.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.84 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 15.60% over the past year.
- MCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.53% yearly.
- Looking at the last year, MCO shows a quite strong growth in Revenue. The Revenue has grown by 8.77% in the last year.
- Measured over the past years, MCO shows a small growth in Revenue. The Revenue has been growing by 7.98% on average per year.
EPS 1Y (TTM)15.6%
EPS 3Y0.49%
EPS 5Y8.53%
EPS Q2Q%22.12%
Revenue 1Y (TTM)8.77%
Revenue growth 3Y4.46%
Revenue growth 5Y7.98%
Sales Q2Q%10.7%
3.2 Future
- MCO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.76% yearly.
- Based on estimates for the next years, MCO will show a small growth in Revenue. The Revenue will grow by 7.37% on average per year.
EPS Next Y18.78%
EPS Next 2Y15.01%
EPS Next 3Y13.99%
EPS Next 5Y12.76%
Revenue Next Year8.33%
Revenue Next 2Y8.09%
Revenue Next 3Y8.05%
Revenue Next 5Y7.37%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 37.85, MCO can be considered very expensive at the moment.
- 78.15% of the companies in the same industry are cheaper than MCO, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 27.30, MCO is valued a bit more expensive.
- MCO is valuated quite expensively with a Price/Forward Earnings ratio of 31.94.
- 68.49% of the companies in the same industry are cheaper than MCO, based on the Price/Forward Earnings ratio.
- MCO is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.85 | ||
| Fwd PE | 31.94 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCO indicates a somewhat cheap valuation: MCO is cheaper than 67.65% of the companies listed in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as MCO.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.23 | ||
| EV/EBITDA | 26.43 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of MCO may justify a higher PE ratio.
- MCO's earnings are expected to grow with 13.99% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.02
PEG (5Y)4.44
EPS Next 2Y15.01%
EPS Next 3Y13.99%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.70%, MCO is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 6.10, MCO is paying slightly less dividend.
- With a Dividend Yield of 0.70, MCO pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
5.2 History
- The dividend of MCO is nicely growing with an annual growth rate of 11.37%!
- MCO has been paying a dividend for at least 10 years, so it has a reliable track record.
- MCO has decreased its dividend recently.
Dividend Growth(5Y)11.37%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- 30.70% of the earnings are spent on dividend by MCO. This is a low number and sustainable payout ratio.
- The dividend of MCO is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP30.7%
EPS Next 2Y15.01%
EPS Next 3Y13.99%
MOODY'S CORP / MCO FAQ
What is the ChartMill fundamental rating of MOODY'S CORP (MCO) stock?
ChartMill assigns a fundamental rating of 5 / 10 to MCO.
Can you provide the valuation status for MOODY'S CORP?
ChartMill assigns a valuation rating of 2 / 10 to MOODY'S CORP (MCO). This can be considered as Overvalued.
How profitable is MOODY'S CORP (MCO) stock?
MOODY'S CORP (MCO) has a profitability rating of 8 / 10.
What is the valuation of MOODY'S CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for MOODY'S CORP (MCO) is 37.85 and the Price/Book (PB) ratio is 23.77.
Can you provide the dividend sustainability for MCO stock?
The dividend rating of MOODY'S CORP (MCO) is 4 / 10 and the dividend payout ratio is 30.7%.