MOODY'S CORP (MCO) Stock Fundamental Analysis
NYSE:MCO - New York Stock Exchange, Inc. - US6153691059 - Common Stock - Currency: USD
MCO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 237 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 quite expensive at the moment. It does show a decent growth rate.
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.
Each year in the past 5 years MCO has been profitable.
In the past 5 years MCO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.77%, MCO belongs to the top of the industry, outperforming 95.36% of the companies in the same industry.
MCO has a better Return On Equity (53.99%) than 97.89% of its industry peers.
MCO has a better Return On Invested Capital (19.43%) than 95.78% of its industry peers.
MCO had an Average Return On Invested Capital over the past 3 years of 16.07%. This is significantly above the industry average of 7.83%.
The last Return On Invested Capital (19.43%) for MCO is above the 3 year average (16.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.77% | ||
| ROE | 53.99% | ||
| ROIC | 19.43% |
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
The Profit Margin of MCO (29.18%) is better than 73.00% of its industry peers.
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 (42.51%) is better than 73.84% of its industry peers.
MCO's Operating Margin has been stable in the last couple of years.
MCO's Gross Margin of 72.78% is fine compared to the rest of the industry. MCO outperforms 77.22% of its industry peers.
MCO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.51% | ||
| PM (TTM) | 29.18% | ||
| GM | 72.78% |
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
The debt/assets ratio for MCO has remained at the same level compared to a year ago.
2.2 Solvency
MCO has a debt to FCF ratio of 2.94. This is a good value and a sign of high solvency as MCO would need 2.94 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.94, MCO is doing good in the industry, outperforming 78.06% 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 76.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 2.94 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 1.75 indicates that MCO should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.75, MCO is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
A Quick Ratio of 1.75 indicates that MCO should not have too much problems paying its short term obligations.
The Quick ratio of MCO (1.75) is better than 67.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.75 |
3. Growth
3.1 Past
MCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.30%, which is quite good.
The Earnings Per Share has been growing by 8.53% on average over the past years. This is quite good.
Looking at the last year, MCO shows a quite strong growth in Revenue. The Revenue has grown by 11.47% 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)17.3%
EPS 3Y0.49%
EPS 5Y8.53%
EPS Q2Q%8.54%
Revenue 1Y (TTM)11.47%
Revenue growth 3Y4.46%
Revenue growth 5Y7.98%
Sales Q2Q%4.46%
3.2 Future
The Earnings Per Share is expected to grow by 10.88% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.47% on average over the next years.
EPS Next Y10.98%
EPS Next 2Y11.91%
EPS Next 3Y12.16%
EPS Next 5Y10.88%
Revenue Next Year5.69%
Revenue Next 2Y7.06%
Revenue Next 3Y7.23%
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
MCO is valuated quite expensively with a Price/Earnings ratio of 38.89.
74.26% of the companies in the same industry are cheaper than MCO, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.54, MCO is valued a bit more expensive.
With a Price/Forward Earnings ratio of 32.89, MCO can be considered very expensive at the moment.
MCO's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. MCO is more expensive than 72.15% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MCO to the average of the S&P500 Index (35.28), we can say MCO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.89 | ||
| Fwd PE | 32.89 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCO is valued a bit cheaper than the industry average as 64.98% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as MCO.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.9 | ||
| EV/EBITDA | 27.19 |
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 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
With a yearly dividend of 0.73%, MCO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 8.25, MCO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.40, MCO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
5.2 History
On average, the dividend of MCO grows each year by 11.37%, which is quite nice.
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 31.75% 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.
DP31.75%
EPS Next 2Y11.91%
EPS Next 3Y12.16%
514.06
-3.42 (-0.66%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners79.63%
Inst Owner Change-0.68%
Ins Owners0.07%
Ins Owner Change0.53%
Market Cap92.22B
Analysts75.33
Price Target525.73 (2.27%)
Short Float %1.3%
Short Ratio3.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
Yearly Dividend3.42
Dividend Growth(5Y)11.37%
DP31.75%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.6%
Min EPS beat(2)3.89%
Max EPS beat(2)7.32%
EPS beat(4)3
Avg EPS beat(4)5.6%
Min EPS beat(4)0%
Max EPS beat(4)11.21%
EPS beat(8)6
Avg EPS beat(8)4.79%
EPS beat(12)9
Avg EPS beat(12)6.17%
EPS beat(16)10
Avg EPS beat(16)4.36%
Revenue beat(2)2
Avg Revenue beat(2)1.54%
Min Revenue beat(2)1.37%
Max Revenue beat(2)1.71%
Revenue beat(4)3
Avg Revenue beat(4)1.43%
Min Revenue beat(4)-2.79%
Max Revenue beat(4)5.41%
Revenue beat(8)5
Avg Revenue beat(8)1.56%
Revenue beat(12)8
Avg Revenue beat(12)1.05%
Revenue beat(16)11
Avg Revenue beat(16)0.88%
PT rev (1m)1.84%
PT rev (3m)1.9%
EPS NQ rev (1m)0.29%
EPS NQ rev (3m)-4.38%
EPS NY rev (1m)0.4%
EPS NY rev (3m)-1.25%
Revenue NQ rev (1m)1.01%
Revenue NQ rev (3m)-1.7%
Revenue NY rev (1m)1.26%
Revenue NY rev (3m)0.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.89 | ||
| Fwd PE | 32.89 | ||
| P/S | 12.62 | ||
| P/FCF | 38.9 | ||
| P/OCF | 34.45 | ||
| P/B | 23.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 27.19 |
EPS(TTM)13.22
EY2.57%
EPS(NY)15.63
Fwd EY3.04%
FCF(TTM)13.22
FCFY2.57%
OCF(TTM)14.92
OCFY2.9%
SpS40.73
BVpS22.01
TBVpS-25.2
PEG (NY)3.54
PEG (5Y)4.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.77% | ||
| ROE | 53.99% | ||
| ROCE | 24.19% | ||
| ROIC | 19.43% | ||
| ROICexc | 23.64% | ||
| ROICexgc | 119.92% | ||
| OM | 42.51% | ||
| PM (TTM) | 29.18% | ||
| GM | 72.78% | ||
| FCFM | 32.45% |
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-Score7
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 2.94 | ||
| Debt/EBITDA | 1.96 | ||
| Cap/Depr | 67.4% | ||
| Cap/Sales | 4.19% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.2% | ||
| Profit Quality | 111.21% | ||
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.75 | ||
| Altman-Z | N/A |
F-Score7
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)17.3%
EPS 3Y0.49%
EPS 5Y8.53%
EPS Q2Q%8.54%
EPS Next Y10.98%
EPS Next 2Y11.91%
EPS Next 3Y12.16%
EPS Next 5Y10.88%
Revenue 1Y (TTM)11.47%
Revenue growth 3Y4.46%
Revenue growth 5Y7.98%
Sales Q2Q%4.46%
Revenue Next Year5.69%
Revenue Next 2Y7.06%
Revenue Next 3Y7.23%
Revenue Next 5Y6.47%
EBIT growth 1Y15.29%
EBIT growth 3Y1.54%
EBIT growth 5Y7.49%
EBIT Next Year17.6%
EBIT Next 3Y12.45%
EBIT Next 5Y10.13%
FCF growth 1Y43.87%
FCF growth 3Y10.55%
FCF growth 5Y9.44%
OCF growth 1Y39.06%
OCF growth 3Y12.28%
OCF growth 5Y11.12%