MOTOROLA SOLUTIONS INC (MSI) Stock Fundamental Analysis
NYSE:MSI - New York Stock Exchange, Inc. - US6200763075 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MSI. MSI was compared to 48 industry peers in the Communications Equipment industry. While MSI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MSI is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MSI was profitable.
In the past year MSI had a positive cash flow from operations.
MSI had positive earnings in each of the past 5 years.
In the past 5 years MSI always reported a positive cash flow from operatings.
1.2 Ratios
MSI has a better Return On Assets (14.18%) than 91.67% of its industry peers.
MSI has a better Return On Equity (124.68%) than 97.92% of its industry peers.
MSI has a better Return On Invested Capital (23.09%) than 93.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MSI is significantly above the industry average of 14.22%.
The last Return On Invested Capital (23.09%) for MSI is above the 3 year average (21.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.18% | ||
| ROE | 124.68% | ||
| ROIC | 23.09% |
ROA(3y)11.42%
ROA(5y)10.64%
ROE(3y)501.22%
ROE(5y)N/A
ROIC(3y)21.45%
ROIC(5y)19.32%
1.3 Margins
MSI has a Profit Margin of 18.67%. This is amongst the best in the industry. MSI outperforms 93.75% of its industry peers.
In the last couple of years the Profit Margin of MSI has grown nicely.
MSI has a better Operating Margin (25.04%) than 95.83% of its industry peers.
MSI's Operating Margin has improved in the last couple of years.
MSI has a Gross Margin of 51.30%. This is in the better half of the industry: MSI outperforms 66.67% of its industry peers.
MSI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.04% | ||
| PM (TTM) | 18.67% | ||
| GM | 51.3% |
OM growth 3Y5.71%
OM growth 5Y3.73%
PM growth 3Y-1.46%
PM growth 5Y5.78%
GM growth 3Y1.01%
GM growth 5Y0.44%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MSI is creating value.
MSI has more shares outstanding than it did 1 year ago.
MSI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MSI has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.92 indicates that MSI is not in any danger for bankruptcy at the moment.
The Altman-Z score of MSI (4.92) is better than 79.17% of its industry peers.
The Debt to FCF ratio of MSI is 2.64, which is a good value as it means it would take MSI, 2.64 years of fcf income to pay off all of its debts.
MSI has a Debt to FCF ratio of 2.64. This is in the better half of the industry: MSI outperforms 64.58% of its industry peers.
MSI has a Debt/Equity ratio of 3.46. This is a high value indicating a heavy dependency on external financing.
MSI has a worse Debt to Equity ratio (3.46) than 91.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.46 | ||
| Debt/FCF | 2.64 | ||
| Altman-Z | 4.92 |
ROIC/WACC2.33
WACC9.9%
2.3 Liquidity
A Current Ratio of 1.20 indicates that MSI should not have too much problems paying its short term obligations.
MSI has a worse Current ratio (1.20) than 75.00% of its industry peers.
A Quick Ratio of 1.03 indicates that MSI should not have too much problems paying its short term obligations.
MSI has a Quick ratio of 1.03. This is in the lower half of the industry: MSI underperforms 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
MSI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.15%, which is quite good.
The Earnings Per Share has been growing by 11.71% on average over the past years. This is quite good.
MSI shows a small growth in Revenue. In the last year, the Revenue has grown by 7.45%.
The Revenue has been growing slightly by 6.52% on average over the past years.
EPS 1Y (TTM)13.15%
EPS 3Y14.8%
EPS 5Y11.71%
EPS Q2Q%13.17%
Revenue 1Y (TTM)7.45%
Revenue growth 3Y9.8%
Revenue growth 5Y6.52%
Sales Q2Q%5.82%
3.2 Future
Based on estimates for the next years, MSI will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.67% on average per year.
The Revenue is expected to grow by 6.16% on average over the next years.
EPS Next Y7.44%
EPS Next 2Y7.81%
EPS Next 3Y9.03%
EPS Next 5Y9.67%
Revenue Next Year5.57%
Revenue Next 2Y5.58%
Revenue Next 3Y6.23%
Revenue Next 5Y6.16%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 28.78, the valuation of MSI can be described as expensive.
Based on the Price/Earnings ratio, MSI is valued a bit cheaper than the industry average as 64.58% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.51. MSI is around the same levels.
A Price/Forward Earnings ratio of 25.43 indicates a quite expensive valuation of MSI.
MSI's Price/Forward Earnings is on the same level as the industry average.
MSI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.58, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.78 | ||
| Fwd PE | 25.43 |
4.2 Price Multiples
MSI's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, MSI is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.04 | ||
| EV/EBITDA | 23.87 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MSI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.87
PEG (5Y)2.46
EPS Next 2Y7.81%
EPS Next 3Y9.03%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.04%, MSI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.53, MSI pays a better dividend. On top of this MSI pays more dividend than 83.33% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, MSI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
5.2 History
The dividend of MSI is nicely growing with an annual growth rate of 11.64%!
MSI has paid a dividend for at least 10 years, which is a reliable track record.
MSI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.64%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
32.89% of the earnings are spent on dividend by MSI. This is a low number and sustainable payout ratio.
MSI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.89%
EPS Next 2Y7.81%
EPS Next 3Y9.03%
408.73
-4.89 (-1.18%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners87.73%
Inst Owner Change0.04%
Ins Owners0.12%
Ins Owner Change11.54%
Market Cap68.23B
Analysts82.35
Price Target505.35 (23.64%)
Short Float %1.27%
Short Ratio2.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
Yearly Dividend3.92
Dividend Growth(5Y)11.64%
DP32.89%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.82%
Min EPS beat(2)3%
Max EPS beat(2)4.64%
EPS beat(4)4
Avg EPS beat(4)5.99%
Min EPS beat(4)3%
Max EPS beat(4)9.69%
EPS beat(8)8
Avg EPS beat(8)6.2%
EPS beat(12)12
Avg EPS beat(12)6.12%
EPS beat(16)16
Avg EPS beat(16)6.09%
Revenue beat(2)0
Avg Revenue beat(2)-0.47%
Min Revenue beat(2)-0.51%
Max Revenue beat(2)-0.43%
Revenue beat(4)2
Avg Revenue beat(4)-0.06%
Min Revenue beat(4)-0.51%
Max Revenue beat(4)0.61%
Revenue beat(8)6
Avg Revenue beat(8)0.24%
Revenue beat(12)10
Avg Revenue beat(12)1.1%
Revenue beat(16)13
Avg Revenue beat(16)1.05%
PT rev (1m)0%
PT rev (3m)-2.31%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.23%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.08%
Revenue NQ rev (1m)-0.22%
Revenue NQ rev (3m)-1.29%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)-0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.78 | ||
| Fwd PE | 25.43 | ||
| P/S | 6.23 | ||
| P/FCF | 30.04 | ||
| P/OCF | 27.08 | ||
| P/B | 41.58 | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.87 |
EPS(TTM)14.2
EY3.47%
EPS(NY)16.07
Fwd EY3.93%
FCF(TTM)13.61
FCFY3.33%
OCF(TTM)15.09
OCFY3.69%
SpS65.64
BVpS9.83
TBVpS-21.29
PEG (NY)3.87
PEG (5Y)2.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.18% | ||
| ROE | 124.68% | ||
| ROCE | 28.85% | ||
| ROIC | 23.09% | ||
| ROICexc | 27.64% | ||
| ROICexgc | 79.78% | ||
| OM | 25.04% | ||
| PM (TTM) | 18.67% | ||
| GM | 51.3% | ||
| FCFM | 20.73% |
ROA(3y)11.42%
ROA(5y)10.64%
ROE(3y)501.22%
ROE(5y)N/A
ROIC(3y)21.45%
ROIC(5y)19.32%
ROICexc(3y)27.05%
ROICexc(5y)24.32%
ROICexgc(3y)98.23%
ROICexgc(5y)78.04%
ROCE(3y)26.79%
ROCE(5y)24.13%
ROICexcg growth 3Y14.88%
ROICexcg growth 5Y11.67%
ROICexc growth 3Y9.54%
ROICexc growth 5Y6.55%
OM growth 3Y5.71%
OM growth 5Y3.73%
PM growth 3Y-1.46%
PM growth 5Y5.78%
GM growth 3Y1.01%
GM growth 5Y0.44%
F-Score8
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.46 | ||
| Debt/FCF | 2.64 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 74.25% | ||
| Cap/Sales | 2.26% | ||
| Interest Coverage | 11.15 | ||
| Cash Conversion | 81.84% | ||
| Profit Quality | 111% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 4.92 |
F-Score8
WACC9.9%
ROIC/WACC2.33
Cap/Depr(3y)68.58%
Cap/Depr(5y)62.85%
Cap/Sales(3y)2.57%
Cap/Sales(5y)2.72%
Profit Quality(3y)118.36%
Profit Quality(5y)126.04%
High Growth Momentum
Growth
EPS 1Y (TTM)13.15%
EPS 3Y14.8%
EPS 5Y11.71%
EPS Q2Q%13.17%
EPS Next Y7.44%
EPS Next 2Y7.81%
EPS Next 3Y9.03%
EPS Next 5Y9.67%
Revenue 1Y (TTM)7.45%
Revenue growth 3Y9.8%
Revenue growth 5Y6.52%
Sales Q2Q%5.82%
Revenue Next Year5.57%
Revenue Next 2Y5.58%
Revenue Next 3Y6.23%
Revenue Next 5Y6.16%
EBIT growth 1Y10.38%
EBIT growth 3Y16.07%
EBIT growth 5Y10.49%
EBIT Next Year18.74%
EBIT Next 3Y11.43%
EBIT Next 5Y8.6%
FCF growth 1Y61.41%
FCF growth 3Y10.21%
FCF growth 5Y6.26%
OCF growth 1Y51.47%
OCF growth 3Y9.18%
OCF growth 5Y5.57%