MOTOROLA SOLUTIONS INC (MSI) Stock Fundamental Analysis
NYSE:MSI - New York Stock Exchange, Inc. - US6200763075 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MSI. MSI was compared to 48 industry peers in the Communications Equipment industry. MSI has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, MSI is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
MSI had positive earnings in the past year.
In the past year MSI had a positive cash flow from operations.
Each year in the past 5 years MSI has been profitable.
Each year in the past 5 years MSI had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MSI (14.18%) is better than 91.67% of its industry peers.
MSI has a better Return On Equity (124.68%) than 97.92% of its industry peers.
MSI has a Return On Invested Capital of 23.09%. This is amongst the best in the industry. MSI outperforms 93.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MSI is significantly above the industry average of 14.31%.
The last Return On Invested Capital (23.09%) for MSI is above the 3 year average (21.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.18% | ||
| ROE | 124.68% | ||
| ROIC | 23.09% |
ROA(3y)11.42%
ROA(5y)10.64%
ROE(3y)501.22%
ROE(5y)N/A
ROIC(3y)21.45%
ROIC(5y)19.32%
1.3 Margins
The Profit Margin of MSI (18.67%) is better than 93.75% of its industry peers.
In the last couple of years the Profit Margin of MSI has grown nicely.
Looking at the Operating Margin, with a value of 25.04%, MSI belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Operating Margin of MSI has grown nicely.
MSI has a better Gross Margin (51.30%) than 68.75% of its industry peers.
In the last couple of years the Gross Margin of MSI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.04% | ||
| PM (TTM) | 18.67% | ||
| GM | 51.3% |
OM growth 3Y5.71%
OM growth 5Y3.73%
PM growth 3Y-1.46%
PM growth 5Y5.78%
GM growth 3Y1.01%
GM growth 5Y0.44%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MSI is creating value.
The number of shares outstanding for MSI has been increased compared to 1 year ago.
MSI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MSI has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.17 indicates that MSI is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.17, MSI belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
The Debt to FCF ratio of MSI is 2.64, which is a good value as it means it would take MSI, 2.64 years of fcf income to pay off all of its debts.
MSI has a better Debt to FCF ratio (2.64) than 64.58% of its industry peers.
A Debt/Equity ratio of 3.46 is on the high side and indicates that MSI has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 3.46, MSI is doing worse than 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.46 | ||
| Debt/FCF | 2.64 | ||
| Altman-Z | 5.17 |
ROIC/WACC2.56
WACC9.02%
2.3 Liquidity
MSI has a Current Ratio of 1.20. This is a normal value and indicates that MSI is financially healthy and should not expect problems in meeting its short term obligations.
MSI's Current ratio of 1.20 is on the low side compared to the rest of the industry. MSI is outperformed by 75.00% of its industry peers.
MSI has a Quick Ratio of 1.03. This is a normal value and indicates that MSI is financially healthy and should not expect problems in meeting its short term obligations.
MSI has a worse Quick ratio (1.03) than 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
MSI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.58%, which is quite good.
The Earnings Per Share has been growing by 11.71% on average over the past years. This is quite good.
MSI shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.41%.
MSI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.52% yearly.
EPS 1Y (TTM)10.58%
EPS 3Y14.8%
EPS 5Y11.71%
EPS Q2Q%10.19%
Revenue 1Y (TTM)8.41%
Revenue growth 3Y9.8%
Revenue growth 5Y6.52%
Sales Q2Q%5.21%
3.2 Future
MSI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.67% yearly.
The Revenue is expected to grow by 6.16% on average over the next years.
EPS Next Y7.44%
EPS Next 2Y7.81%
EPS Next 3Y9.03%
EPS Next 5Y9.67%
Revenue Next Year5.59%
Revenue Next 2Y5.61%
Revenue Next 3Y6.19%
Revenue Next 5Y6.16%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 31.21, MSI can be considered very expensive at the moment.
MSI's Price/Earnings ratio is in line with the industry average.
MSI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.48.
MSI is valuated quite expensively with a Price/Forward Earnings ratio of 28.21.
MSI's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.04, MSI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.21 | ||
| Fwd PE | 28.21 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MSI is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, MSI is valued a bit cheaper than the industry average as 60.42% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.33 | ||
| EV/EBITDA | 25.58 |
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 MSI may justify a higher PE ratio.
PEG (NY)4.19
PEG (5Y)2.66
EPS Next 2Y7.81%
EPS Next 3Y9.03%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, MSI is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.73, MSI pays a better dividend. On top of this MSI pays more dividend than 83.33% of the companies listed in the same industry.
With a Dividend Yield of 0.99, MSI pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
On average, the dividend of MSI grows each year by 11.64%, which is quite nice.
MSI has paid a dividend for at least 10 years, which is a reliable track record.
MSI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.64%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
32.89% of the earnings are spent on dividend by MSI. This is a low number and sustainable payout ratio.
The dividend of MSI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP32.89%
EPS Next 2Y7.81%
EPS Next 3Y9.03%
453.41
+8.31 (+1.87%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners87.73%
Inst Owner Change-0.91%
Ins Owners0.12%
Ins Owner Change11.54%
Market Cap75.68B
Analysts81.05
Price Target505.35 (11.46%)
Short Float %1.38%
Short Ratio2.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend3.92
Dividend Growth(5Y)11.64%
DP32.89%
Div Incr Years13
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.82%
Min EPS beat(2)3%
Max EPS beat(2)4.64%
EPS beat(4)4
Avg EPS beat(4)5.99%
Min EPS beat(4)3%
Max EPS beat(4)9.69%
EPS beat(8)8
Avg EPS beat(8)6.2%
EPS beat(12)12
Avg EPS beat(12)6.12%
EPS beat(16)16
Avg EPS beat(16)6.09%
Revenue beat(2)0
Avg Revenue beat(2)-0.47%
Min Revenue beat(2)-0.51%
Max Revenue beat(2)-0.43%
Revenue beat(4)2
Avg Revenue beat(4)-0.06%
Min Revenue beat(4)-0.51%
Max Revenue beat(4)0.61%
Revenue beat(8)6
Avg Revenue beat(8)0.24%
Revenue beat(12)10
Avg Revenue beat(12)1.1%
Revenue beat(16)13
Avg Revenue beat(16)1.05%
PT rev (1m)-0.14%
PT rev (3m)-2.44%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-3.3%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.08%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-1.25%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.21 | ||
| Fwd PE | 28.21 | ||
| P/S | 6.91 | ||
| P/FCF | 33.33 | ||
| P/OCF | 30.04 | ||
| P/B | 46.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.58 |
EPS(TTM)14.53
EY3.2%
EPS(NY)16.07
Fwd EY3.55%
FCF(TTM)13.61
FCFY3%
OCF(TTM)15.09
OCFY3.33%
SpS65.64
BVpS9.83
TBVpS-21.29
PEG (NY)4.19
PEG (5Y)2.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.18% | ||
| ROE | 124.68% | ||
| ROCE | 28.85% | ||
| ROIC | 23.09% | ||
| ROICexc | 27.64% | ||
| ROICexgc | 79.78% | ||
| OM | 25.04% | ||
| PM (TTM) | 18.67% | ||
| GM | 51.3% | ||
| FCFM | 20.73% |
ROA(3y)11.42%
ROA(5y)10.64%
ROE(3y)501.22%
ROE(5y)N/A
ROIC(3y)21.45%
ROIC(5y)19.32%
ROICexc(3y)27.05%
ROICexc(5y)24.32%
ROICexgc(3y)98.23%
ROICexgc(5y)78.04%
ROCE(3y)26.79%
ROCE(5y)24.13%
ROICexcg growth 3Y14.88%
ROICexcg growth 5Y11.67%
ROICexc growth 3Y9.54%
ROICexc growth 5Y6.55%
OM growth 3Y5.71%
OM growth 5Y3.73%
PM growth 3Y-1.46%
PM growth 5Y5.78%
GM growth 3Y1.01%
GM growth 5Y0.44%
F-Score8
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.46 | ||
| Debt/FCF | 2.64 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 74.25% | ||
| Cap/Sales | 2.26% | ||
| Interest Coverage | 11.15 | ||
| Cash Conversion | 81.84% | ||
| Profit Quality | 111% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 5.17 |
F-Score8
WACC9.02%
ROIC/WACC2.56
Cap/Depr(3y)68.58%
Cap/Depr(5y)62.85%
Cap/Sales(3y)2.57%
Cap/Sales(5y)2.72%
Profit Quality(3y)118.36%
Profit Quality(5y)126.04%
High Growth Momentum
Growth
EPS 1Y (TTM)10.58%
EPS 3Y14.8%
EPS 5Y11.71%
EPS Q2Q%10.19%
EPS Next Y7.44%
EPS Next 2Y7.81%
EPS Next 3Y9.03%
EPS Next 5Y9.67%
Revenue 1Y (TTM)8.41%
Revenue growth 3Y9.8%
Revenue growth 5Y6.52%
Sales Q2Q%5.21%
Revenue Next Year5.59%
Revenue Next 2Y5.61%
Revenue Next 3Y6.19%
Revenue Next 5Y6.16%
EBIT growth 1Y10.38%
EBIT growth 3Y16.07%
EBIT growth 5Y10.49%
EBIT Next Year19.26%
EBIT Next 3Y11.75%
EBIT Next 5Y8.6%
FCF growth 1Y61.41%
FCF growth 3Y10.21%
FCF growth 5Y6.26%
OCF growth 1Y51.47%
OCF growth 3Y9.18%
OCF growth 5Y5.57%