MOODY'S CORP (MCO)
US6153691059 - Common Stock
We assign a fundamental rating of 5 out of 10 to MCO. MCO was compared to 210 industry peers in the Capital Markets industry. MCO scores excellent on profitability, but 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
In the past year MCO was profitable.
In the past year MCO had a positive cash flow from operations.
MCO had positive earnings in each of the past 5 years.
Each year in the past 5 years MCO had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.99%, MCO belongs to the top of the industry, outperforming 88.94% of the companies in the same industry.
The Return On Equity of MCO (48.43%) is better than 97.12% of its industry peers.
The Return On Invested Capital of MCO (15.11%) is better than 90.38% of its industry peers.
MCO had an Average Return On Invested Capital over the past 3 years of 16.02%. This is significantly above the industry average of 8.34%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.99% | ||
| ROE | 48.43% | ||
| ROIC | 15.11% |
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
MCO has a better Profit Margin (27.16%) than 62.50% of its industry peers.
MCO's Profit Margin has declined in the last couple of years.
MCO's Operating Margin of 37.59% is fine compared to the rest of the industry. MCO outperforms 62.02% of its industry peers.
In the last couple of years the Operating Margin of MCO has declined.
With a decent Gross Margin value of 71.48%, MCO is doing good in the industry, outperforming 72.60% 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 | 37.59% | ||
| PM (TTM) | 27.16% | ||
| GM | 71.48% |
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
MCO has less shares outstanding than it did 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
MCO has an Altman-Z score of 6.10. This indicates that MCO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MCO (6.10) is better than 90.38% of its industry peers.
MCO has a debt to FCF ratio of 3.72. This is a good value and a sign of high solvency as MCO would need 3.72 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.72, MCO is in the better half of the industry, outperforming 71.63% of the companies in the same industry.
MCO has a Debt/Equity ratio of 2.11. This is a high value indicating a heavy dependency on external financing.
MCO has a Debt to Equity ratio of 2.11. This is in the lower half of the industry: MCO underperforms 77.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.11 | ||
| Debt/FCF | 3.72 | ||
| Altman-Z | 6.1 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 1.74 indicates that MCO should not have too much problems paying its short term obligations.
MCO's Current ratio of 1.74 is fine compared to the rest of the industry. MCO outperforms 64.42% of its industry peers.
MCO has a Quick Ratio of 1.74. This is a normal value and indicates that MCO is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.74, MCO is doing good in the industry, outperforming 64.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.74 |
3. Growth
3.1 Past
MCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.77%, which is quite good.
Measured over the past 5 years, MCO shows a small growth in Earnings Per Share. The EPS has been growing by 6.07% on average per year.
Looking at the last year, MCO shows a quite strong growth in Revenue. The Revenue has grown by 8.19% in the last year.
MCO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.90% yearly.
EPS 1Y (TTM)15.77%
EPS 3Y-0.76%
EPS 5Y6.07%
EPS growth Q2Q36.87%
Revenue 1Y (TTM)8.19%
Revenue growth 3Y3.27%
Revenue growth 5Y5.9%
Revenue growth Q2Q14.73%
3.2 Future
The Earnings Per Share is expected to grow by 13.36% on average over the next years. This is quite good.
MCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.63% yearly.
EPS Next Y7.77%
EPS Next 2Y11.92%
EPS Next 3Y13.29%
EPS Next 5Y13.36%
Revenue Next Year10.05%
Revenue Next 2Y9.8%
Revenue Next 3Y9.62%
Revenue Next 5Y7.63%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 38.18, MCO can be considered very expensive at the moment.
Based on the Price/Earnings ratio, MCO is valued more expensive than 81.73% of the companies in the same industry.
MCO is valuated expensively when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 35.43, the valuation of MCO can be described as expensive.
Based on the Price/Forward Earnings ratio, MCO is valued a bit more expensive than the industry average as 74.52% of the companies are valued more cheaply.
MCO's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.63.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.18 | ||
| Fwd PE | 35.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCO is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCO is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.74 | ||
| EV/EBITDA | 28.2 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MCO does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of MCO may justify a higher PE ratio.
MCO's earnings are expected to grow with 13.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.91
PEG (5Y)6.29
EPS Next 2Y11.92%
EPS Next 3Y13.29%
5. Dividend
5.1 Amount
With a yearly dividend of 0.91%, MCO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 7.77, MCO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.44, MCO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
5.2 History
On average, the dividend of MCO grows each year by 11.82%, which is quite nice.
MCO has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)11.82%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
35.10% 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.
DP35.1%
EPS Next 2Y11.92%
EPS Next 3Y13.29%
MOODY'S CORP
NYSE:MCO (4/26/2024, 1:05:04 PM)
378.37
+3.19 (+0.85%)
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 Cap69.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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Revenue NQ rev (1m)
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Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.18 | ||
| Fwd PE | 35.43 | ||
| 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)4.91
PEG (5Y)6.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.99% | ||
| ROE | 48.43% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 37.59% | ||
| PM (TTM) | 27.16% | ||
| GM | 71.48% | ||
| 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 Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.11 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.74 | ||
| 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)
Growth
EPS 1Y (TTM)15.77%
EPS 3Y-0.76%
EPS 5Y
EPS growth Q2Q
EPS Next Y7.77%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.19%
Revenue growth 3Y3.27%
Revenue growth 5Y
Revenue growth 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
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OCF growth 3Y
OCF growth 5Y