2024-02-06 13:07:03 ET
Summary
- Motorola Solutions is a company that specializes in communication, technology, and public safety solutions for government and commercial customers.
- MSI has been in a multi-year transition to a more software oriented business model. As a result, sales and margin growth has led to strong free-cash-flow generation (and investor returns).
- MSI has a strong backlog ($14.3 billion) that equates to well over a year's worth of revenue. Dividends have grown at double-digits since 2015.
- The company is scheduled to release its Q4 earnings report on Thursday, February 8. Today, I'll give an earnings preview, a FY24 outlook, and my recommendation on the stock.
My past Seeking Alpha articles on Motorola Solutions ( MSI ) have typically received a relatively low number of page-views. I find that interesting given the company's strong free-cash-flow profile, excellent dividend growth , and its strong total returns. Indeed, as you can see in the graphic below, over the past 5-years MSI has outperformed the S&P 500, as measured by the Vanguard S&P 500 ETF ( VOO ), by nearly 100%. My instincts tell me that the disconnect is likely due to investor belief that "Motorola" is (still ...) the company that ran a cyclical semiconductor business tied to the automotive industry and one that was the clear leader in cell-phones before losing its lead to Nokia and eventually to Apple. Yet Motorola Solutions is certainly not your father's "Motorola" - the semiconductor business was spun-off many years ago and the company does not focus on the commercial smartphone market at all. Today, I will preview MSI's upcoming Q4 report and its outlook going forward. But first, I will start with an overview of the investment thesis of today's Motorola Solutions....
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Motorola Solutions: Q4 Preview, FY24 Outlook And Advice