MOTOROLA SOLUTIONS INC (MSI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MSI - US6200763075 - Common Stock
405.08 USD
-1 (-0.25%)
405.08 USD
0 (0%)
Taking everything into account, MSI scores 6 out of 10 in our fundamental rating. MSI was compared to 48 industry peers in the Communications Equipment industry. MSI has an excellent profitability rating, but there are some minor concerns on its financial health. MSI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year MSI was profitable.
- MSI had a positive operating cash flow in the past year.
- Each year in the past 5 years MSI has been profitable.
- In the past 5 years MSI always reported a positive cash flow from operatings.
1.2 Ratios
- MSI has a Return On Assets of 11.26%. This is amongst the best in the industry. MSI outperforms 91.67% of its industry peers.
- MSI has a Return On Equity of 90.93%. This is amongst the best in the industry. MSI outperforms 97.92% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 16.09%, MSI belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for MSI is significantly above the industry average of 12.17%.
- The 3 year average ROIC (21.45%) for MSI is well above the current ROIC(16.09%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.26% | ||
| ROE | 90.93% | ||
| ROIC | 16.09% |
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 18.70%. This is amongst the best in the industry. MSI outperforms 93.75% of its industry peers.
- MSI's Profit Margin has improved in the last couple of years.
- MSI has a better Operating Margin (25.00%) than 93.75% of its industry peers.
- MSI's Operating Margin has improved in the last couple of years.
- With a decent Gross Margin value of 51.41%, MSI is doing good in the industry, outperforming 68.75% of the companies in the same industry.
- MSI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25% | ||
| PM (TTM) | 18.7% | ||
| GM | 51.41% |
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
- MSI has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for MSI has been increased compared to 1 year ago.
- Compared to 5 years ago, MSI has less shares outstanding
- Compared to 1 year ago, MSI has an improved debt to assets ratio.
2.2 Solvency
- MSI has an Altman-Z score of 3.76. This indicates that MSI is financially healthy and has little risk of bankruptcy at the moment.
- MSI has a better Altman-Z score (3.76) than 66.67% of its industry peers.
- The Debt to FCF ratio of MSI is 3.87, which is a good value as it means it would take MSI, 3.87 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 3.87, MSI is in line with its industry, outperforming 56.25% of the companies in the same industry.
- A Debt/Equity ratio of 4.01 is on the high side and indicates that MSI has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 4.01, MSI is doing worse than 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.01 | ||
| Debt/FCF | 3.87 | ||
| Altman-Z | 3.76 |
ROIC/WACC1.65
WACC9.76%
2.3 Liquidity
- MSI has a Current Ratio of 1.03. This is a normal value and indicates that MSI is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of MSI (1.03) is worse than 87.50% of its industry peers.
- A Quick Ratio of 0.86 indicates that MSI may have some problems paying its short term obligations.
- MSI has a Quick ratio of 0.86. This is amonst the worse of the industry: MSI underperforms 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.47% over the past year.
- The Earnings Per Share has been growing by 11.71% on average over the past years. This is quite good.
- The Revenue has been growing slightly by 6.17% in the past year.
- Measured over the past years, MSI shows a small growth in Revenue. The Revenue has been growing by 6.52% on average per year.
EPS 1Y (TTM)8.47%
EPS 3Y14.8%
EPS 5Y11.71%
EPS Q2Q%8.56%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y9.8%
Revenue growth 5Y6.52%
Sales Q2Q%7.85%
3.2 Future
- The Earnings Per Share is expected to grow by 10.40% on average over the next years. This is quite good.
- MSI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.11% yearly.
EPS Next Y10.68%
EPS Next 2Y9.18%
EPS Next 3Y9.5%
EPS Next 5Y10.4%
Revenue Next Year7.78%
Revenue Next 2Y8.01%
Revenue Next 3Y7.28%
Revenue Next 5Y7.11%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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
- Based on the Price/Earnings ratio of 27.28, the valuation of MSI can be described as expensive.
- MSI's Price/Earnings ratio is a bit cheaper when compared to the industry. MSI is cheaper than 66.67% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, MSI is valued at the same level.
- With a Price/Forward Earnings ratio of 24.57, MSI is valued on the expensive side.
- Based on the Price/Forward Earnings ratio, MSI is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
- MSI is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.28 | ||
| Fwd PE | 24.57 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as MSI.
- 60.42% of the companies in the same industry are more expensive than MSI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.95 | ||
| EV/EBITDA | 23.51 |
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)2.55
PEG (5Y)2.33
EPS Next 2Y9.18%
EPS Next 3Y9.5%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.22%, MSI has a reasonable but not impressive dividend return.
- MSI's Dividend Yield is rather good when compared to the industry average which is at 0.77. MSI pays more dividend than 83.33% of the companies in the same industry.
- MSI's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
5.2 History
- The dividend of MSI is nicely growing with an annual growth rate of 11.64%!
- MSI has been paying a dividend for at least 10 years, so it has 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
- MSI pays out 33.55% of its income as dividend. This is a sustainable payout ratio.
- The dividend of MSI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.55%
EPS Next 2Y9.18%
EPS Next 3Y9.5%
MOTOROLA SOLUTIONS INC / MSI FAQ
What is the ChartMill fundamental rating of MOTOROLA SOLUTIONS INC (MSI) stock?
ChartMill assigns a fundamental rating of 6 / 10 to MSI.
What is the valuation status of MOTOROLA SOLUTIONS INC (MSI) stock?
ChartMill assigns a valuation rating of 4 / 10 to MOTOROLA SOLUTIONS INC (MSI). This can be considered as Fairly Valued.
Can you provide the profitability details for MOTOROLA SOLUTIONS INC?
MOTOROLA SOLUTIONS INC (MSI) has a profitability rating of 9 / 10.
What is the earnings growth outlook for MOTOROLA SOLUTIONS INC?
The Earnings per Share (EPS) of MOTOROLA SOLUTIONS INC (MSI) is expected to grow by 10.68% in the next year.
Can you provide the dividend sustainability for MSI stock?
The dividend rating of MOTOROLA SOLUTIONS INC (MSI) is 6 / 10 and the dividend payout ratio is 33.55%.