MOTOROLA SOLUTIONS INC (MSI) Stock Fundamental Analysis
NYSE:MSI - New York Stock Exchange, Inc. - US6200763075 - Common Stock - Currency: USD
MSI gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 49 industry peers in the Communications Equipment industry. While MSI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MSI is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MSI was profitable.
MSI had a positive operating cash flow in the past year.
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
MSI has a Return On Assets of 14.18%. This is amongst the best in the industry. MSI outperforms 91.84% of its industry peers.
MSI has a better Return On Equity (124.68%) than 97.96% of its industry peers.
MSI has a Return On Invested Capital of 23.09%. This is amongst the best in the industry. MSI outperforms 93.88% of its industry peers.
MSI had an Average Return On Invested Capital over the past 3 years of 21.45%. This is significantly above the industry average of 13.73%.
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
Looking at the Profit Margin, with a value of 18.67%, MSI belongs to the top of the industry, outperforming 93.88% of the companies in the same industry.
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 95.92% 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 65.31% of its industry peers.
MSI's Gross Margin has been stable in the last couple of years.
| 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
MSI has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for MSI has been increased compared to 1 year ago.
Compared to 5 years ago, MSI has less shares outstanding
MSI has a better debt/assets ratio than last year.
2.2 Solvency
MSI has an Altman-Z score of 5.00. This indicates that MSI is financially healthy and has little risk of bankruptcy at the moment.
MSI's Altman-Z score of 5.00 is amongst the best of the industry. MSI outperforms 83.67% of its industry peers.
MSI has a debt to FCF ratio of 2.64. This is a good value and a sign of high solvency as MSI would need 2.64 years to pay back of all of its debts.
With a Debt to FCF ratio value of 2.64, MSI perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
A Debt/Equity ratio of 3.46 is on the high side and indicates that MSI has dependencies on debt financing.
With a Debt to Equity ratio value of 3.46, MSI is not doing good in the industry: 91.84% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.46 | ||
| Debt/FCF | 2.64 | ||
| Altman-Z | 5 |
ROIC/WACC2.4
WACC9.63%
2.3 Liquidity
A Current Ratio of 1.20 indicates that MSI should not have too much problems paying 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 77.55% 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 69.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.15% over the past year.
The Earnings Per Share has been growing by 11.71% on average over the past years. This is quite good.
MSI shows a small growth in Revenue. In the last year, the Revenue has grown by 7.45%.
Measured over the past years, MSI shows a small growth in Revenue. The Revenue has been growing by 6.52% on average per year.
EPS 1Y (TTM)13.15%
EPS 3Y14.8%
EPS 5Y11.71%
EPS Q2Q%13.17%
Revenue 1Y (TTM)7.45%
Revenue growth 3Y9.8%
Revenue growth 5Y6.52%
Sales Q2Q%5.82%
3.2 Future
The Earnings Per Share is expected to grow by 9.66% on average over the next years. This is quite good.
MSI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.26% yearly.
EPS Next Y7.44%
EPS Next 2Y7.81%
EPS Next 3Y8.67%
EPS Next 5Y9.66%
Revenue Next Year5.66%
Revenue Next 2Y5.68%
Revenue Next 3Y5.89%
Revenue Next 5Y6.26%
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.
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 29.78, which means the current valuation is very expensive for MSI.
63.27% of the companies in the same industry are more expensive than MSI, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.60, MSI is valued at the same level.
A Price/Forward Earnings ratio of 26.31 indicates a quite expensive valuation of MSI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MSI is on the same level as its industry peers.
MSI is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.78 | ||
| Fwd PE | 26.31 |
4.2 Price Multiples
MSI's Enterprise Value to EBITDA ratio is in line with the industry average.
MSI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.09 | ||
| EV/EBITDA | 24.38 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MSI does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of MSI may justify a higher PE ratio.
PEG (NY)4
PEG (5Y)2.54
EPS Next 2Y7.81%
EPS Next 3Y8.67%
5. Dividend
5.1 Amount
MSI has a Yearly Dividend Yield of 1.02%. Purely for dividend investing, there may be better candidates out there.
MSI's Dividend Yield is rather good when compared to the industry average which is at 3.60. MSI pays more dividend than 81.63% of the companies in the same industry.
With a Dividend Yield of 1.02, MSI pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.02% |
5.2 History
The dividend of MSI is nicely growing with an annual growth rate of 11.64%!
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.
MSI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.89%
EPS Next 2Y7.81%
EPS Next 3Y8.67%
422.93
-2.36 (-0.55%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners87.86%
Inst Owner Change1.01%
Ins Owners0.12%
Ins Owner Change11.76%
Market Cap70.61B
Analysts82.35
Price Target505.63 (19.55%)
Short Float %1.14%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.02% |
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)-2.25%
PT rev (3m)-3.33%
EPS NQ rev (1m)-3.23%
EPS NQ rev (3m)-3.44%
EPS NY rev (1m)-0.08%
EPS NY rev (3m)0.3%
Revenue NQ rev (1m)-1.07%
Revenue NQ rev (3m)-1.57%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.78 | ||
| Fwd PE | 26.31 | ||
| P/S | 6.44 | ||
| P/FCF | 31.09 | ||
| P/OCF | 28.03 | ||
| P/B | 43.03 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.38 |
EPS(TTM)14.2
EY3.36%
EPS(NY)16.07
Fwd EY3.8%
FCF(TTM)13.6
FCFY3.22%
OCF(TTM)15.09
OCFY3.57%
SpS65.63
BVpS9.83
TBVpS-21.28
PEG (NY)4
PEG (5Y)2.54
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 |
F-Score8
WACC9.63%
ROIC/WACC2.4
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)13.15%
EPS 3Y14.8%
EPS 5Y11.71%
EPS Q2Q%13.17%
EPS Next Y7.44%
EPS Next 2Y7.81%
EPS Next 3Y8.67%
EPS Next 5Y9.66%
Revenue 1Y (TTM)7.45%
Revenue growth 3Y9.8%
Revenue growth 5Y6.52%
Sales Q2Q%5.82%
Revenue Next Year5.66%
Revenue Next 2Y5.68%
Revenue Next 3Y5.89%
Revenue Next 5Y6.26%
EBIT growth 1Y10.38%
EBIT growth 3Y16.07%
EBIT growth 5Y10.49%
EBIT Next Year19.45%
EBIT Next 3Y11.7%
EBIT Next 5Y8.78%
FCF growth 1Y61.41%
FCF growth 3Y10.21%
FCF growth 5Y6.26%
OCF growth 1Y51.47%
OCF growth 3Y9.18%
OCF growth 5Y5.57%