MOODY'S CORP (MCO) Stock Fundamental Analysis
NYSE:MCO - New York Stock Exchange, Inc. - US6153691059 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MCO. MCO was compared to 233 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.
In the past 5 years MCO has always 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 13.95%. This is amongst the best in the industry. MCO outperforms 95.28% of its industry peers.
MCO has a Return On Equity of 56.92%. This is amongst the best in the industry. MCO outperforms 98.28% of its industry peers.
Looking at the Return On Invested Capital, with a value of 20.12%, MCO belongs to the top of the industry, outperforming 96.57% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MCO is significantly above the industry average of 7.86%.
The last Return On Invested Capital (20.12%) for MCO is above the 3 year average (16.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.95% | ||
| ROE | 56.92% | ||
| ROIC | 20.12% |
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
Looking at the Profit Margin, with a value of 29.14%, MCO is in the better half of the industry, outperforming 73.82% of the companies in the same industry.
MCO's Profit Margin has been stable in the last couple of years.
MCO has a better Operating Margin (42.24%) than 73.82% of its industry peers.
In the last couple of years the Operating Margin of MCO has remained more or less at the same level.
MCO's Gross Margin of 72.75% is fine compared to the rest of the industry. MCO outperforms 76.82% of its industry peers.
In the last couple of years the Gross Margin of MCO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.24% | ||
| PM (TTM) | 29.14% | ||
| GM | 72.75% |
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
MCO has less shares outstanding than it did 1 year ago.
MCO has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MCO has remained at the same level compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.54 indicates that MCO is not in any danger for bankruptcy at the moment.
MCO's Altman-Z score of 7.54 is amongst the best of the industry. MCO outperforms 91.42% of its industry peers.
MCO has a debt to FCF ratio of 2.73. This is a good value and a sign of high solvency as MCO would need 2.73 years to pay back of all of its debts.
MCO's Debt to FCF ratio of 2.73 is amongst the best of the industry. MCO outperforms 81.12% of its industry peers.
A Debt/Equity ratio of 1.84 is on the high side and indicates that MCO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.84, MCO is not doing good in the industry: 77.68% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 2.73 | ||
| Altman-Z | 7.54 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 1.56 indicates that MCO should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.56, MCO is doing good in the industry, outperforming 63.52% of the companies in the same industry.
A Quick Ratio of 1.56 indicates that MCO should not have too much problems paying its short term obligations.
MCO has a Quick ratio of 1.56. This is in the better half of the industry: MCO outperforms 63.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.56 |
3. Growth
3.1 Past
MCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.75%, which is quite impressive.
The Earnings Per Share has been growing by 8.53% on average over the past years. This is quite good.
MCO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.95%.
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)25.75%
EPS 3Y0.49%
EPS 5Y8.53%
EPS Q2Q%13.65%
Revenue 1Y (TTM)15.95%
Revenue growth 3Y4.46%
Revenue growth 5Y7.98%
Sales Q2Q%7.73%
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 10.88% yearly.
MCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.47% yearly.
EPS Next Y10.98%
EPS Next 2Y11.91%
EPS Next 3Y12.16%
EPS Next 5Y10.88%
Revenue Next Year4.62%
Revenue Next 2Y6.33%
Revenue Next 3Y6.91%
Revenue Next 5Y6.47%
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
A Price/Earnings ratio of 38.90 indicates a quite expensive valuation of MCO.
Compared to the rest of the industry, the Price/Earnings ratio of MCO indicates a slightly more expensive valuation: MCO is more expensive than 74.68% of the companies listed in the same industry.
MCO is valuated rather expensively when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 32.21 indicates a quite expensive valuation of MCO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCO indicates a slightly more expensive valuation: MCO is more expensive than 71.67% of the companies listed in the same industry.
MCO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 35.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.9 | ||
| Fwd PE | 32.21 |
4.2 Price Multiples
65.24% of the companies in the same industry are more expensive than MCO, based on the Enterprise Value to EBITDA ratio.
MCO's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.28 | ||
| EV/EBITDA | 27.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MCO has an outstanding profitability rating, which may justify a higher PE ratio.
MCO's earnings are expected to grow with 12.16% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.54
PEG (5Y)4.56
EPS Next 2Y11.91%
EPS Next 3Y12.16%
5. Dividend
5.1 Amount
MCO has a yearly dividend return of 0.74%, which is pretty low.
MCO's Dividend Yield is slightly below the industry average, which is at 7.77.
Compared to an average S&P500 Dividend Yield of 2.35, MCO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
5.2 History
The dividend of MCO is nicely growing with an annual growth rate of 11.37%!
MCO has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of MCO decreased recently.
Dividend Growth(5Y)11.37%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
MCO pays out 31.34% of its income as dividend. This is a sustainable payout ratio.
MCO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP31.34%
EPS Next 2Y11.91%
EPS Next 3Y12.16%
503.42
+3.89 (+0.78%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners79.63%
Inst Owner Change0%
Ins Owners0.07%
Ins Owner Change0.88%
Market Cap90.57B
Analysts75.33
Price Target516.21 (2.54%)
Short Float %1.7%
Short Ratio3.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.74% |
Yearly Dividend3.42
Dividend Growth(5Y)11.37%
DP31.34%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.66%
Min EPS beat(2)0%
Max EPS beat(2)7.32%
EPS beat(4)3
Avg EPS beat(4)6.55%
Min EPS beat(4)0%
Max EPS beat(4)11.21%
EPS beat(8)6
Avg EPS beat(8)4.5%
EPS beat(12)8
Avg EPS beat(12)5.47%
EPS beat(16)10
Avg EPS beat(16)5.03%
Revenue beat(2)1
Avg Revenue beat(2)-0.71%
Min Revenue beat(2)-2.79%
Max Revenue beat(2)1.37%
Revenue beat(4)3
Avg Revenue beat(4)2.07%
Min Revenue beat(4)-2.79%
Max Revenue beat(4)5.41%
Revenue beat(8)5
Avg Revenue beat(8)1.58%
Revenue beat(12)7
Avg Revenue beat(12)0.57%
Revenue beat(16)11
Avg Revenue beat(16)1%
PT rev (1m)0.32%
PT rev (3m)-6.89%
EPS NQ rev (1m)1.17%
EPS NQ rev (3m)-10.29%
EPS NY rev (1m)0.25%
EPS NY rev (3m)-2.65%
Revenue NQ rev (1m)0.65%
Revenue NQ rev (3m)-5.77%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)-1.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.9 | ||
| Fwd PE | 32.21 | ||
| P/S | 12.53 | ||
| P/FCF | 36.28 | ||
| P/OCF | 32.12 | ||
| P/B | 24.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 27.01 |
EPS(TTM)12.94
EY2.57%
EPS(NY)15.63
Fwd EY3.1%
FCF(TTM)13.87
FCFY2.76%
OCF(TTM)15.68
OCFY3.11%
SpS40.17
BVpS20.57
TBVpS-25.1
PEG (NY)3.54
PEG (5Y)4.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.95% | ||
| ROE | 56.92% | ||
| ROCE | 25.06% | ||
| ROIC | 20.12% | ||
| ROICexc | 24.56% | ||
| ROICexgc | 139.02% | ||
| OM | 42.24% | ||
| PM (TTM) | 29.14% | ||
| GM | 72.75% | ||
| FCFM | 34.54% |
ROA(3y)11.28%
ROA(5y)12.65%
ROE(3y)53.57%
ROE(5y)71.04%
ROIC(3y)16.07%
ROIC(5y)17.25%
ROICexc(3y)20.2%
ROICexc(5y)21.81%
ROICexgc(3y)132.71%
ROICexgc(5y)140.15%
ROCE(3y)20.01%
ROCE(5y)21.48%
ROICexcg growth 3Y21.88%
ROICexcg growth 5Y10.45%
ROICexc growth 3Y6.4%
ROICexc growth 5Y0.62%
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%
F-Score8
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 2.73 | ||
| Debt/EBITDA | 1.95 | ||
| Cap/Depr | 72.97% | ||
| Cap/Sales | 4.48% | ||
| Interest Coverage | 11.26 | ||
| Cash Conversion | 80.66% | ||
| Profit Quality | 118.52% | ||
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.56 | ||
| Altman-Z | 7.54 |
F-Score8
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)77.23%
Cap/Depr(5y)66.52%
Cap/Sales(3y)4.74%
Cap/Sales(5y)3.68%
Profit Quality(3y)108.72%
Profit Quality(5y)105.07%
High Growth Momentum
Growth
EPS 1Y (TTM)25.75%
EPS 3Y0.49%
EPS 5Y8.53%
EPS Q2Q%13.65%
EPS Next Y10.98%
EPS Next 2Y11.91%
EPS Next 3Y12.16%
EPS Next 5Y10.88%
Revenue 1Y (TTM)15.95%
Revenue growth 3Y4.46%
Revenue growth 5Y7.98%
Sales Q2Q%7.73%
Revenue Next Year4.62%
Revenue Next 2Y6.33%
Revenue Next 3Y6.91%
Revenue Next 5Y6.47%
EBIT growth 1Y23.96%
EBIT growth 3Y1.54%
EBIT growth 5Y7.49%
EBIT Next Year17.6%
EBIT Next 3Y12.45%
EBIT Next 5Y10.13%
FCF growth 1Y89.81%
FCF growth 3Y10.55%
FCF growth 5Y9.44%
OCF growth 1Y74.94%
OCF growth 3Y12.28%
OCF growth 5Y11.12%