MOODY'S CORP (MCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCO - US6153691059 - Common Stock
525.42 USD
+1.38 (+0.26%)
525.42 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to MCO. MCO was compared to 237 industry peers in the Capital Markets industry. While MCO has a great profitability rating, 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's Return On Assets of 14.56% is amongst the best of the industry. MCO outperforms 94.51% of its industry peers.
- The Return On Equity of MCO (56.71%) is better than 98.73% of its industry peers.
- The Return On Invested Capital of MCO (20.43%) is better than 96.62% of its industry peers.
- The Average Return On Invested Capital over the past 3 years 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 better Profit Margin (29.92%) than 74.26% of its industry peers.
- In the last couple of years the Profit Margin of MCO has remained more or less at the same level.
- Looking at the Operating Margin, with a value of 43.81%, MCO is in the better half of the industry, outperforming 78.90% 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 81.86% of the companies in the same industry.
- 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 | 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
- The number of shares outstanding for MCO has been reduced compared to 1 year ago.
- The number of shares outstanding for MCO has been reduced compared to 5 years ago.
- 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.
- With a decent Debt to FCF ratio value of 2.91, MCO is doing good in the industry, outperforming 79.32% of the companies in the same industry.
- MCO has a Debt/Equity ratio of 1.76. This is a high value indicating a heavy dependency on external financing.
- MCO's Debt to Equity ratio of 1.76 is on the low side compared to the rest of the industry. MCO is outperformed by 75.11% 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's Current ratio of 1.84 is fine compared to the rest of the industry. MCO outperforms 72.15% 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.
- Looking at the Quick ratio, with a value of 1.84, MCO is in the better half of the industry, outperforming 72.15% 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.
- The Revenue is expected to grow by 7.37% on average over the next years.
EPS Next Y19.02%
EPS Next 2Y15.08%
EPS Next 3Y14.09%
EPS Next 5Y12.76%
Revenue Next Year8.41%
Revenue Next 2Y8.1%
Revenue Next 3Y8.04%
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.
- 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 37.72, the valuation of MCO can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of MCO indicates a slightly more expensive valuation: MCO is more expensive than 77.64% of the companies listed in the same industry.
- MCO's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.25.
- A Price/Forward Earnings ratio of 31.79 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 69.62% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. MCO is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.72 | ||
| Fwd PE | 31.79 |
4.2 Price Multiples
- MCO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MCO is cheaper than 67.51% of the companies 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 | 39.09 | ||
| EV/EBITDA | 26.2 |
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 14.09% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.98
PEG (5Y)4.42
EPS Next 2Y15.08%
EPS Next 3Y14.09%
5. Dividend
5.1 Amount
- MCO has a yearly dividend return of 0.71%, which is pretty low.
- Compared to an average industry Dividend Yield of 5.87, MCO is paying slightly less dividend.
- Compared to an average S&P500 Dividend Yield of 1.82, MCO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
- On average, the dividend of MCO grows each year by 11.37%, which is quite nice.
- MCO has been paying a dividend for at least 10 years, so it has 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
- 30.70% of the earnings are spent on dividend by MCO. This is a low number and sustainable payout ratio.
- MCO's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP30.7%
EPS Next 2Y15.08%
EPS Next 3Y14.09%
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 37.72 and the Price/Book (PB) ratio is 23.69.
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%.