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 232 industry peers in the Capital Markets industry. While MCO belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MCO is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MCO was profitable.
MCO had a positive operating cash flow in the past year.
MCO had positive earnings in each of the past 5 years.
MCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MCO has a Return On Assets of 13.95%. This is amongst the best in the industry. MCO outperforms 95.26% of its industry peers.
MCO has a better Return On Equity (56.92%) than 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 96.12% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MCO is significantly above the industry average of 7.88%.
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 71.98% of the companies in the same industry.
In the last couple of years the Profit Margin of MCO has remained more or less at the same level.
The Operating Margin of MCO (42.24%) is better than 74.57% of its industry peers.
MCO's Operating Margin has been stable in the last couple of years.
MCO has a better Gross Margin (72.75%) than 76.72% 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
The number of shares outstanding for MCO has been reduced compared to 1 year ago.
Compared to 5 years ago, MCO has less shares outstanding
Compared to 1 year ago, MCO has about the same debt to assets ratio.
2.2 Solvency
MCO has an Altman-Z score of 7.41. This indicates that MCO is financially healthy and has little risk of bankruptcy at the moment.
MCO's Altman-Z score of 7.41 is amongst the best of the industry. MCO outperforms 92.67% of its industry peers.
The Debt to FCF ratio of MCO is 2.73, which is a good value as it means it would take MCO, 2.73 years of fcf income to pay off all of its debts.
MCO has a Debt to FCF ratio of 2.73. This is amongst the best in the industry. MCO outperforms 80.60% 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.
Looking at the Debt to Equity ratio, with a value of 1.84, MCO is doing worse than 77.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 2.73 | ||
| Altman-Z | 7.41 |
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.
The Current ratio of MCO (1.56) is better than 62.93% of its industry peers.
A Quick Ratio of 1.56 indicates that MCO should not have too much problems paying its short term obligations.
The Quick ratio of MCO (1.56) is better than 62.93% 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.
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 15.95% in the last year.
The Revenue has been growing slightly by 7.98% on average over the past years.
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
Based on estimates for the next years, MCO will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.88% on average per year.
Based on estimates for the next years, MCO will show a small growth in Revenue. The Revenue will grow by 6.47% on average per year.
EPS Next Y10.71%
EPS Next 2Y11.83%
EPS Next 3Y12.41%
EPS Next 5Y10.88%
Revenue Next Year4.44%
Revenue Next 2Y6.28%
Revenue Next 3Y6.84%
Revenue Next 5Y6.47%
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 accelerating.
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
The Price/Earnings ratio is 37.52, which means the current valuation is very expensive for MCO.
MCO's Price/Earnings ratio is a bit more expensive when compared to the industry. MCO is more expensive than 74.57% of the companies in the same industry.
When comparing the Price/Earnings ratio of MCO to the average of the S&P500 Index (26.53), we can say MCO is valued slightly more expensively.
With a Price/Forward Earnings ratio of 31.11, MCO can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, MCO is valued a bit more expensive than the industry average as 70.69% of the companies are valued more cheaply.
The average S&P500 Price/Forward Earnings ratio is at 22.27. MCO is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.52 | ||
| Fwd PE | 31.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCO is valued a bit cheaper than 65.09% of the companies in the same industry.
MCO's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35 | ||
| EV/EBITDA | 26.29 |
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.
A more expensive valuation may be justified as MCO's earnings are expected to grow with 12.41% in the coming years.
PEG (NY)3.5
PEG (5Y)4.4
EPS Next 2Y11.83%
EPS Next 3Y12.41%
5. Dividend
5.1 Amount
MCO has a yearly dividend return of 0.77%, which is pretty low.
MCO's Dividend Yield is slightly below the industry average, which is at 8.22.
Compared to an average S&P500 Dividend Yield of 2.39, MCO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.77% |
5.2 History
The dividend of MCO is nicely growing with an annual growth rate of 11.37%!
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
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 2Y11.83%
EPS Next 3Y12.41%
485.55
-3.4 (-0.7%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners78.4%
Inst Owner Change0.9%
Ins Owners0.08%
Ins Owner Change0.91%
Market Cap87.35B
Analysts75.33
Price Target514.55 (5.97%)
Short Float %1.97%
Short Ratio3.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.77% |
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)-0.27%
PT rev (3m)-6.96%
EPS NQ rev (1m)-2.3%
EPS NQ rev (3m)-12%
EPS NY rev (1m)-1.49%
EPS NY rev (3m)-2.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-6.77%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-2.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.52 | ||
| Fwd PE | 31.11 | ||
| P/S | 12.09 | ||
| P/FCF | 35 | ||
| P/OCF | 30.98 | ||
| P/B | 23.61 | ||
| P/tB | N/A | ||
| EV/EBITDA | 26.29 |
EPS(TTM)12.94
EY2.67%
EPS(NY)15.61
Fwd EY3.21%
FCF(TTM)13.87
FCFY2.86%
OCF(TTM)15.68
OCFY3.23%
SpS40.17
BVpS20.57
TBVpS-25.1
PEG (NY)3.5
PEG (5Y)4.4
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 | 7.41 |
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 Y10.71%
EPS Next 2Y11.83%
EPS Next 3Y12.41%
EPS Next 5Y10.88%
Revenue 1Y (TTM)15.95%
Revenue growth 3Y4.46%
Revenue growth 5Y7.98%
Sales Q2Q%7.73%
Revenue Next Year4.44%
Revenue Next 2Y6.28%
Revenue Next 3Y6.84%
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%