May 26, 2025 a 03:31 pm
MCO: Dividend Analysis - Moody's Corporation
Moody's Corporation, a leader in credit ratings, research, and risk analysis, offers a stable dividend profile with a track record of 26 years of consistent payments. Despite a modest dividend yield, Moody's exhibits reliable growth potential in its dividend payouts, which enhances its attractiveness to long-term investors seeking steady income coupled with the potential for capital appreciation.
📊 Overview
Moody's Corporation operates within the financial sector, offering a modest but stable dividend yield complemented by a robust history of 26 years without recent cuts or suspensions, showcasing its resilience and commitment to shareholder returns.
| Metric | Details |
|---|---|
| Sector | Financial Services |
| Dividend yield | 0.73 % |
| Current dividend per share | 3.41 USD |
| Dividend history | 26 years |
| Last cut or suspension | None |
📈 Dividend History
The dividend history of Moody's showcases a long-standing commitment to returning capital to shareholders, instrumental for investors valuing predictability in their portfolios.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.88 |
| 2024 | 3.40 |
| 2023 | 3.08 |
| 2022 | 2.8 |
| 2021 | 2.48 |
📈 Dividend Growth
Moody's has demonstrated consistent dividend growth over the past years, signifying robust operational performance and future growth potential.
| Time | Growth |
|---|---|
| 3 years | 11.09 % |
| 5 years | 11.20 % |
The average dividend growth is 11.20 % over 5 years. This shows moderate but steady dividend growth.
⚖️ Payout Ratio
The payout ratios provide insights into the sustainability of Moody's dividends, with particularly favorable EPS and free cash flow ratios.
| Key figure ratio | Percentage |
|---|---|
| EPS-based | 29.15 % |
| Free cash flow-based | 23.77 % |
Moody's an optimal payout ratio allows room for growth and investment, adding a layer of security for future dividend payments.
💰 Cashflow & Capital Efficiency
Cash flow and capital efficiency metrics are crucial for evaluating Moody's operational health and investment potential, offering investors a view into their ability to sustain growth and manage expenses.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.93 % | 2.63 % | 2.32 % |
| Earnings Yield | 2.39 % | 2.25 % | 2.68 % |
| CAPEX to Operating Cash Flow | 8.47 % | 12.60 % | 19.20 % |
| Stock-based Compensation to Revenue | 3.10 % | 3.26 % | 3.09 % |
| Free Cash Flow / Operating Cash Flow Ratio | 88.83 % | 87.40 % | 80.80 % |
Moody's demonstrates solid cash flow management reflected in their healthy free cash flow yields and earnings efficiency, crucial for sustainable growth and financial health.
🔍 Balance Sheet & Leverage Analysis
Understanding leverage and balance sheet structure is vital for assessing Moody's financial risk and the capacity to weather economic fluctuations.
| Leverage Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 217.28 % | 223.48 % | 18.82 % |
| Debt-to-Assets | 49.96 % | 50.71 % | 3.30 % |
| Debt-to-Capital | 68.48 % | 69.08 % | 15.84 % |
| Net Debt to EBITDA | 1.60 | 2.03 | -0.55 |
| Current Ratio | 1.47 | 1.73 | 1.72 |
| Quick Ratio | 1.47 | 1.74 | 3.20 |
| Financial Leverage | 4.35 | 4.41 | 5.70 |
Moody's balance sheet reflects strong leverage control while maintaining solid liquidity positions, a testament to its balanced capital structure and prudent financial management.
🗣️ Fundamental Strength & Profitability
Profitability and fundamental strength are key drivers of Moody's ability to generate returns, set apart by robust margins and strong returns on equity.
| Profitability Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 57.73 % | 48.43 % | 54.55 % |
| Return on Assets | 13.27 % | 10.99 % | 9.58 % |
| Return on Invested Capital | 17.26 % | 14.39 % | 12.06 % |
| Net Profit Margin | 29.03 % | 27.16 % | 25.13 % |
| EBIT Margin | 42.86 % | 37.75 % | 36.69 % |
| EBITDA Margin | 47.04 % | 44.05 % | 42.70 % |
| Gross Margin | 72.56 % | 71.48 % | 70.50 % |
| Research & Development to Revenue | 0.00 % | 0.00 % | 0.00 % |
Moody's demonstrates strong profitability metrics, with significant returns on equity and margins that support ongoing financial strength and profitability.
📈 Price Development
✅ Dividend Scoring System
| Category | Score (out of 5) | Score Bar |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 33 out of 40
🗣️ Rating
Moody's Corporation showcases robust financial metrics and a strong dividend policy, making it a modest yet secure choice for income-focused investors looking for stability and low dividend yield. While the yield may not be significant, its growth, stability, and financial health provide a reliable investment proposition with consistent returns.