Motorola recently hit a new all-time high of $339.63 and is now up a whopping 773% since the old company spun off its cellphone business as a separate firm in January 2011.
The remaining operations, which make police radios and related equipment, became the firm we’re discussing today. The company’s continuing focus on these vital products helps cut its risk. The company’s expanded software operations should also push the stock higher over the next few years.
Meanwhile, the shares trades at a reasonable 26.5 times the company’s 2024 earnings forecast.
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MOTOROLA SOLUTIONS INC. (New York symbol MSI; www.motorolasolutions.com) makes specialized communications equipment such as radios for police and fire vehicles.
Motorola tends to fuel its growth with acquisitions. However, it cuts the risk of this strategy by focusing on smaller firms that enhance its technology or its presence in certain markets. Some of its latest purchases include spending $553 million for Rave Mobile Safety, a maker of software to help public safety agencies communicate and collaborate during emergencies; it also spent $388 million for Ava Security, which specializes in cloud-based video analysis.
The company has paid an undisclosed sum for IPVideo. This private company is the creator of the HALO Smart Sensor, a multi-functional device that can detect a wide range of safety threats, including smoke, abnormal noise and motion.
This product is mainly for areas not suitable for traditional surveillance cameras due to privacy concerns, such as restrooms, hotel rooms and hospitals. This acquisition complements Motorola’s other products, and increases the appeal of its security systems.
Growth Stocks: Motorola’s earnings, revenue and now dividends rise higher together
Motorola’s revenue in the fourth quarter of 2023 rose 5.2%, to $2.85 billion from $2.71 billion a year earlier on higher demand for its radio and video systems, as well as its software products. The latest sales figure also topped the consensus estimate of $2.83 billion.
Earnings before one-time items also gained 8.3%, to $3.90 a share from $3.60. That beat the consensus estimate of $3.63.
For 2024, Motorola expects is revenue will rise about 6%. Its full-year earnings should also improve 6% to $12.72 a share. The stock trades at a reasonable 26.5 times the midpoint of that range.
Moreover, the company raised your quarterly dividend by 11.4% with the January 2024 payment. Investors now receive $0.98 a share instead of $0.88. The new annual rate of $3.92 yields 1.2%. As well, Motorola increased its share repurchase authorization by $2 billion. It can now buy back up to $18 billion of its shares, which is equal to 32% of its $56.1 billion market cap. There is no expiry date for those purchases.
Recommendation in Wall Street Stock Forecaster: Motorola Solutions Inc. is a buy.
