MOODY'S CORP (MCO)
US6153691059 - Common Stock
We assign a fundamental rating of 6 out of 10 to MCO. MCO was compared to 222 industry peers in the Capital Markets industry. MCO scores excellent on profitability, but 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.
In the past 5 years MCO has always been profitable.
Each year in the past 5 years MCO had a positive operating cash flow.
1.2 Ratios
MCO has a better Return On Assets (11.21%) than 89.35% of its industry peers.
With an excellent Return On Equity value of 47.08%, MCO belongs to the best of the industry, outperforming 97.22% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 17.43%, MCO belongs to the top of the industry, outperforming 93.06% 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 7.98%.
The 3 year average ROIC (16.02%) for MCO is below the current ROIC(17.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.21% | ||
| ROE | 47.08% | ||
| ROIC | 17.43% |
ROA(3y)11.88%
ROA(5y)12.77%
ROE(3y)61.39%
ROE(5y)105.97%
ROIC(3y)16.02%
ROIC(5y)17.66%
1.3 Margins
Looking at the Profit Margin, with a value of 27.01%, MCO is in the better half of the industry, outperforming 64.81% of the companies in the same industry.
In the last couple of years the Profit Margin of MCO has declined.
MCO has a better Operating Margin (39.51%) than 66.20% of its industry peers.
In the last couple of years the Operating Margin of MCO has declined.
Looking at the Gross Margin, with a value of 72.30%, MCO is in the better half of the industry, outperforming 74.54% 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 | 39.51% | ||
| PM (TTM) | 27.01% | ||
| GM | 72.3% |
OM growth 3Y-6.21%
OM growth 5Y-2.8%
PM growth 3Y-6.38%
PM growth 5Y-1.62%
GM growth 3Y-0.49%
GM growth 5Y-0.13%
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 an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.63 indicates that MCO is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 6.63, MCO belongs to the best of the industry, outperforming 90.28% of the companies in the same industry.
MCO has a debt to FCF ratio of 3.40. This is a good value and a sign of high solvency as MCO would need 3.40 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.40, MCO is in the better half of the industry, outperforming 67.13% of the companies in the same industry.
A Debt/Equity ratio of 1.75 is on the high side and indicates that MCO has dependencies on debt financing.
MCO has a Debt to Equity ratio of 1.75. This is in the lower half of the industry: MCO underperforms 77.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.75 | ||
| Debt/FCF | 3.4 | ||
| Altman-Z | 6.63 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 1.42 indicates that MCO should not have too much problems paying its short term obligations.
MCO's Current ratio of 1.42 is in line compared to the rest of the industry. MCO outperforms 56.02% of its industry peers.
MCO has a Quick Ratio of 1.42. This is a normal value and indicates that MCO is financially healthy and should not expect problems in meeting its short term obligations.
MCO's Quick ratio of 1.42 is in line compared to the rest of the industry. MCO outperforms 56.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.42 | ||
| Quick Ratio | 1.42 |
3. Growth
3.1 Past
MCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.95%, which is quite impressive.
The Earnings Per Share has been growing slightly by 6.07% on average over the past years.
The Revenue has grown by 8.19% in the past year. This is quite good.
MCO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.90% yearly.
EPS 1Y (TTM)28.95%
EPS 3Y-0.76%
EPS 5Y6.07%
EPS Q2Q%42.61%
Revenue 1Y (TTM)8.19%
Revenue growth 3Y3.27%
Revenue growth 5Y5.9%
Sales Q2Q%21.62%
3.2 Future
The Earnings Per Share is expected to grow by 12.38% on average over the next years. This is quite good.
MCO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.21% yearly.
EPS Next Y10.42%
EPS Next 2Y12.49%
EPS Next 3Y13.77%
EPS Next 5Y12.38%
Revenue Next Year10.58%
Revenue Next 2Y9.69%
Revenue Next 3Y9.63%
Revenue Next 5Y8.21%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 38.79, the valuation of MCO can be described as expensive.
78.70% of the companies in the same industry are cheaper than MCO, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 24.29. MCO is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 34.86 indicates a quite expensive valuation of MCO.
74.54% of the companies in the same industry are cheaper than MCO, based on the Price/Forward Earnings ratio.
MCO's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 20.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.79 | ||
| Fwd PE | 34.86 |
4.2 Price Multiples
MCO's Enterprise Value to EBITDA is on the same level as the industry average.
MCO's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.1 | ||
| EV/EBITDA | 29.35 |
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 13.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.72
PEG (5Y)6.39
EPS Next 2Y12.49%
EPS Next 3Y13.77%
5. Dividend
5.1 Amount
MCO has a yearly dividend return of 0.75%, which is pretty low.
Compared to an average industry Dividend Yield of 7.38, MCO is paying slightly less dividend.
With a Dividend Yield of 0.75, MCO pays less dividend than the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
5.2 History
The dividend of MCO is nicely growing with an annual growth rate of 11.82%!
MCO has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.82%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
34.34% 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.
DP34.34%
EPS Next 2Y12.49%
EPS Next 3Y13.77%
MOODY'S CORP
NYSE:MCO (7/25/2024, 7:04:00 PM)
After market: 437.21 0 (0%)437.21
+3.4 (+0.78%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap79.83B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.79 | ||
| Fwd PE | 34.86 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.72
PEG (5Y)6.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.21% | ||
| ROE | 47.08% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 39.51% | ||
| PM (TTM) | 27.01% | ||
| GM | 72.3% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.75 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.42 | ||
| Quick Ratio | 1.42 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)28.95%
EPS 3Y-0.76%
EPS 5Y
EPS Q2Q%
EPS Next Y10.42%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.19%
Revenue growth 3Y3.27%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y