Assessing the Sustainability and Growth of MSI's Dividends
Motorola Solutions Inc (MSI, Financial) recently announced a dividend of $0.98 per share, payable on 2024-04-15, with the ex-dividend date set for 2024-03-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Motorola Solutions Inc's dividend performance and assess its sustainability.
What Does Motorola Solutions Inc Do?
Motorola Solutions is a leading provider of communications and analytics, primarily serving public safety departments as well as schools, hospitals, and businesses. The bulk of the firm's revenue comes from sales of land mobile radios and radio network infrastructure, but the firm also sells surveillance equipment and dispatch software. Most of Motorola's revenue comes from government agencies, while roughly 25% comes from schools and private businesses. Motorola has customers in over 100 countries and in every state in the United States.
A Glimpse at Motorola Solutions Inc's Dividend History
Motorola Solutions Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Motorola Solutions Inc has increased its dividend each year since 2011. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Motorola Solutions Inc's Dividend Yield and Growth
As of today, Motorola Solutions Inc currently has a 12-month trailing dividend yield of 1.07% and a 12-month forward dividend yield of 1.16%. This suggests an expectation of increased dividend payments over the next 12 months. Motorola Solutions Inc's dividend yield of 1.07% is near a 10-year low and underperforms than 74.07% of global competitors in the Hardware industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Motorola Solutions Inc's annual dividend growth rate was 11.20%. Extended to a five-year horizon, this rate stayed the same. And over the past decade, Motorola Solutions Inc's annual dividends per share growth rate stands at an impressive 12.20%. Based on Motorola Solutions Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Motorola Solutions Inc stock as of today is approximately 1.82%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Motorola Solutions Inc's dividend payout ratio is 0.33.
Motorola Solutions Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Motorola Solutions Inc's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Motorola Solutions Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Motorola Solutions Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Motorola Solutions Inc's revenue has increased by approximately 10.80% per year on average, a rate that outperforms than approximately 69.04% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Motorola Solutions Inc's earnings increased by approximately 26.20% per year on average, a rate that outperforms than approximately 66.74% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 12.30%, which outperforms than approximately 54.36% of global competitors.
Next Steps
Considering Motorola Solutions Inc's consistent dividend payments, robust dividend growth rate, reasonable payout ratio, strong profitability, and positive growth metrics, the company presents a compelling case for value investors seeking stable income streams. As the company continues to navigate the complexities of the hardware industry, its strategic initiatives and competitive position may further bolster its dividend prospects. With the next dividend payment approaching, investors should consider whether Motorola Solutions Inc aligns with their investment goals and risk tolerance. For those seeking additional high-dividend opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover other potential investments.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
