MOTOROLA SOLUTIONS INC (MSI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MSI - US6200763075 - Common Stock
401.07 USD
-0.59 (-0.15%)
401.07 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. 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.
- In the past 5 years MSI has always been profitable.
- Each year in the past 5 years MSI had a positive operating cash flow.
1.2 Ratios
- MSI has a better Return On Assets (11.26%) than 91.67% of its industry peers.
- The Return On Equity of MSI (90.93%) is better than 97.92% of its industry peers.
- MSI's Return On Invested Capital of 16.09% is amongst the best of the industry. MSI outperforms 91.67% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for MSI is significantly above the industry average of 12.17%.
- The last Return On Invested Capital (16.09%) for MSI is well below the 3 year average (21.45%), which needs to be investigated, but indicates that MSI had better years and this may not be a problem.
| 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's Profit Margin of 18.70% is amongst the best of the industry. MSI outperforms 93.75% of its industry peers.
- In the last couple of years the Profit Margin of MSI has grown nicely.
- Looking at the Operating Margin, with a value of 25.00%, MSI belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
- In the last couple of years the Operating Margin of MSI has grown nicely.
- MSI's Gross Margin of 51.41% is fine compared to the rest of the industry. MSI outperforms 68.75% of its industry peers.
- 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MSI 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
- The debt/assets ratio for MSI has been reduced compared to a year ago.
2.2 Solvency
- MSI has an Altman-Z score of 3.73. This indicates that MSI is financially healthy and has little risk of bankruptcy at the moment.
- MSI has a Altman-Z score of 3.73. This is in the better half of the industry: MSI outperforms 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.
- MSI has a Debt to FCF ratio (3.87) which is comparable to the rest of the industry.
- MSI has a Debt/Equity ratio of 4.01. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of MSI (4.01) is worse than 91.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.01 | ||
| Debt/FCF | 3.87 | ||
| Altman-Z | 3.73 |
ROIC/WACC1.65
WACC9.73%
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.
- MSI has a worse Current ratio (1.03) than 87.50% of its industry peers.
- MSI has a Quick Ratio of 1.03. This is a bad value and indicates that MSI is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.86, MSI is doing worse than 83.33% of the companies in the same industry.
| 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.
- MSI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.71% yearly.
- The Revenue has been growing slightly by 6.17% in the past year.
- MSI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.52% yearly.
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
- Based on estimates for the next years, MSI will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.40% on average per year.
- The Revenue is expected to grow by 7.11% on average over the next years.
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
- The EPS growth rate is stable: in the next years the growth will be about the same 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
- MSI is valuated quite expensively with a Price/Earnings ratio of 27.01.
- Based on the Price/Earnings ratio, MSI is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, MSI is valued at the same level.
- With a Price/Forward Earnings ratio of 24.33, 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.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, MSI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.01 | ||
| Fwd PE | 24.33 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MSI is on the same level as its industry peers.
- 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 | 27.67 | ||
| EV/EBITDA | 23.25 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MSI does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of MSI may justify a higher PE ratio.
PEG (NY)2.53
PEG (5Y)2.31
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.
- Compared to an average industry Dividend Yield of 0.77, 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 the average S&P500 Dividend Yield of 1.82, MSI is paying slightly less dividend.
| 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 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
- 33.55% 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.
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%.