September 07, 2025 a 07:47 am
MCO: Dividend Analysis - Moody's Corporation
Moody's Corporation exemplifies a robust dividend history backed by solid growth and fiscal prudence. Given its stable dividend payouts and consistent financial performance, it stands as an attractive option for income-focused investors, despite a modest dividend yield. Its impressive 26-year record of uninterrupted dividends highlights its commitment to shareholders.
📊 Overview
| Category | Details |
|---|---|
| Sector | Financial Services |
| Dividend Yield | 0.71% |
| Current Dividend Per Share | 3.41 USD |
| Dividend History | 26 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The dividend history of Moody's Corporation reveals a progressively increasing payout trend, underscoring the company's financial resilience and shareholder commitment. This track record is critical for evaluating the dependability of future income streams.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 2.82 |
| 2024 | 3.40 |
| 2023 | 3.08 |
| 2022 | 2.80 |
| 2021 | 2.48 |
📈 Dividend Growth
Moody's dividend growth over the past years underscores its robust financial strategy and capacity to enhance shareholder value. Past growth trends provide insight into future 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
A low payout ratio suggests that Moody's has ample room to sustain and potentially increase its dividend payments without compromising its financial flexibility.
| Key figure | Ratio |
|---|---|
| EPS-based | 28.78% |
| Free cash flow-based | 25.01% |
The EPS payout ratio at 28.78% and FCF payout ratio at 25.01% are both indicative of sustainable dividend policies.
✅ Cashflow & Capital Efficiency
These metrics lend insight into Moody's operational efficacy and its capacity to generate free cash flow, which is pivotal for sustaining dividends.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 2.32% | 2.63% | 2.93% |
| Earnings Yield | 2.68% | 2.25% | 2.39% |
| CAPEX to Operating Cash Flow | 19.20% | 12.60% | 11.20% |
| Stock-based Compensation to Revenue | 3.09% | 3.26% | 3.10% |
| Free Cash Flow / Operating Cash Flow Ratio | 80.80% | 87.40% | 88.83% |
Moody's high free cash flow to operating cash flow ratio indicates efficient capital use, enhancing its dividend sustainability.
Balance Sheet & Leverage Analysis
Moody's maintains financial stability, highlighted by its manageable debt levels, ensuring steady dividend payouts even across economic cycles.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 3.12 | 2.23 | 2.17 |
| Debt-to-Assets | 54.80% | 50.71% | 49.96% |
| Debt-to-Capital | 75.74% | 69.08% | 68.48% |
| Net Debt to EBITDA | 2.61 | 2.03 | 1.54 |
| Current Ratio | 1.72 | 1.74 | 1.47 |
| Quick Ratio | 3.20 | 1.74 | 1.47 |
| Financial Leverage | 5.69 | 4.41 | 4.35 |
Moody's leverage ratios indicate a robust capacity to finance dividend payouts while maintaining capital structure flexibility.
🔍 Fundamental Strength & Profitability
This examination of profitability metrics highlights Moody's superior ability to leverage its assets into earnings and dividends.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 54.55% | 48.43% | 57.73% |
| Return on Assets | 9.58% | 10.99% | 13.27% |
| Margins: Net | 25.13% | 27.16% | 29.03% |
| Margins: EBIT | 36.69% | 37.75% | 42.86% |
| Margins: EBITDA | 42.70% | 44.05% | 48.94% |
| Margins: Gross | 70.50% | 71.48% | 72.56% |
| Research & Development to Revenue | 0.00% | 0.00% | 0.00% |
The solid profit margins and returns at Moody's are testament to its ability to generate substantial earnings from its operations, a crucial factor for ongoing dividend growth.
Price Development
🔢 Dividend Scoring System
| Category | Score | Indicator |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 34 out of 40
Rating
Moody's Corporation presents itself as a reliable choice for prudent investors seeking steady dividend income against a backdrop of solid financial fundamentals. While the yield is modest, the security and growth potential of dividends remain significant, meriting a positive recommendation for inclusion in income-focused portfolios.