Updated 3/11/25

Motorola Solutions has built a strong reputation as a leader in mission-critical communications, serving public safety, government agencies, and businesses worldwide. The company’s ability to provide secure and reliable communication systems has made it a trusted name in its field. Over the years, Motorola Solutions has successfully expanded beyond hardware, incorporating software and services that generate recurring revenue, which has strengthened its financial foundation.

With a market capitalization of nearly $70 billion, the company has proven its resilience, adapting to evolving technology needs while maintaining steady revenue growth. Dividend investors looking for stability and long-term income generation may find this stock worth a closer look.

Key Dividend Metrics

📈 Forward Annual Dividend Rate: $4.36
💰 Forward Dividend Yield: 1.05%
📊 Trailing Annual Dividend Rate: $4.03
🔄 5-Year Average Dividend Yield: 1.26%
📆 Next Dividend Date: April 15, 2025
📉 Ex-Dividend Date: March 14, 2025
💸 Payout Ratio: 43.66%

Dividend Overview

Motorola Solutions has consistently paid dividends, demonstrating a commitment to rewarding shareholders. While the 1.05% dividend yield may not seem overly generous, it reflects the company’s disciplined approach to capital allocation. Investors who prioritize dividend reliability over high yields may find this stock appealing.

Compared to its five-year average yield of 1.26%, the current yield is slightly lower. This is often a sign that the stock price has appreciated faster than dividend increases, making it less attractive for those seeking higher yields. However, for investors focused on steady growth and financial stability, the company’s consistent dividend payments remain a positive factor.

The payout ratio of 43.66% suggests that the company is maintaining a healthy balance between rewarding shareholders and reinvesting in its business. This level of payout leaves room for future dividend increases without stretching the company’s financial position too thin.

Dividend Growth and Safety

A reliable dividend stock should not only offer steady payouts but also demonstrate the ability to grow those payments over time. Motorola Solutions has been increasing its dividend steadily, which is a sign of financial strength and shareholder commitment.

One of the most critical factors in dividend safety is free cash flow, and the company generates a strong cash position with $1.86 billion in levered free cash flow. This provides plenty of coverage for dividend payments, reducing the risk of cuts even in tougher economic environments.

One area that requires attention is the company’s debt level. With a debt-to-equity ratio of 381.09%, Motorola Solutions operates with a high amount of leverage. While its cash flow comfortably covers obligations for now, excessive debt can become a burden if interest rates rise or revenue growth slows. Investors should monitor how the company manages its debt in the coming years.

Chart Analysis

Price Movement and Trend

Motorola Solutions (MSI) has experienced a significant price movement over the past year, with a strong uptrend that peaked near the $500 mark. After reaching those highs, the stock has since pulled back and is now trading around $413.08. The recent decline has seen the stock break below its 50-day moving average, which had previously acted as a dynamic support level.

Now, MSI is sitting near its 200-day moving average, which could serve as a key level for traders and investors watching for support. A failure to hold this level could indicate further downside, while a strong bounce could suggest that long-term buyers are stepping in.

Moving Averages

The 50-day moving average (orange line) is now trending downward, signaling a shift in short-term momentum. When a stock trades below its 50-day moving average, it often indicates weakening bullish sentiment. Meanwhile, the 200-day moving average (blue line) continues to rise, showing that the long-term trend remains positive despite recent weakness.

What’s concerning here is the fact that MSI attempted to reclaim the 50-day moving average multiple times but failed to hold above it. This suggests that the shorter-term trend may be turning bearish, and the stock could continue to see selling pressure unless it can regain strength.

Volume Activity

Trading volume has remained relatively stable for most of the recent price action, though there have been a few notable spikes. A significant volume surge accompanied the sharp decline from all-time highs, suggesting that institutional investors may have been reducing positions.

More recently, volume has not shown a strong increase on the latest price recovery attempts, which is something to watch. If MSI is to reclaim a stronger position, it would ideally need to see renewed buying interest reflected in higher volume on green days.

Relative Strength Index (RSI)

The RSI, which measures momentum, has been trending lower and is currently hovering near the lower range. This suggests that MSI has been in a period of weakness, and while it isn’t in extreme oversold territory, it’s approaching levels where the stock has historically seen bounces.

If RSI begins to turn back upward, it could signal a potential reversal, but as of now, momentum appears to be favoring the downside.

Key Levels to Watch

• Support at the 200-day moving average: This is a critical level where long-term investors may look to step in. If this level breaks, the next potential support zone would be around the $380-$390 range.
• Resistance at the 50-day moving average: If MSI can reclaim the 50-day moving average, it could indicate a shift back to a more bullish outlook.
• Volume spikes: A notable increase in buying volume could be an early sign of a reversal.

The recent technical breakdown below the 50-day moving average suggests some caution in the short term, while the longer-term trend remains intact as long as the 200-day moving average holds.

Analyst Ratings

Upgrades

📈 StockNews.com – On February 18, 2025, analysts at StockNews.com upgraded MSI from a hold rating to a buy rating. This decision was influenced by the company’s steady revenue growth and dominant position in the mission-critical communications sector. Analysts pointed to its strong contract pipeline and recurring revenue streams as key factors supporting long-term upside.

🔵 Fitch Ratings – On February 27, 2025, Fitch Ratings upgraded Motorola Solutions’ short-term ratings to F2. The upgrade reflects improving balance sheet flexibility, aided by stable high single-digit revenue growth and effective debt management. Fitch also highlighted MSI’s ability to generate consistent free cash flow, which provides financial stability and supports its ongoing dividend program.

Downgrades

📉 StockNews.com – On February 10, 2025, analysts at StockNews.com downgraded MSI from a buy rating to a hold rating. The downgrade came as valuation concerns began to surface. The stock’s recent price surge has pushed it into overvalued territory compared to historical levels, leading analysts to take a more cautious stance.

🟠 Barclays PLC – On February 14, 2025, Barclays PLC adjusted its price target for MSI from 529.00 to 527.00, maintaining an overweight rating. While not a direct downgrade, the small reduction in price target suggests a slightly less optimistic view on near-term performance. Analysts cited potential market volatility and macroeconomic pressures as reasons for the tempered expectations.

Consensus Price Target

📊 The current consensus price target for Motorola Solutions is 522.43, indicating a potential upside from current trading levels. Analysts remain largely positive on the stock, with a mix of buy and hold ratings reflecting confidence in the company’s fundamentals while acknowledging short-term valuation risks.

Earnings Report Summary

Motorola Solutions wrapped up 2024 on a strong note, delivering solid financial results for both the fourth quarter and the full year. The company saw steady growth across key segments, reinforcing its position in the public safety and communications sector.

Fourth Quarter Highlights

Revenue for the quarter came in at $3.0 billion, up 6% from the previous year. The biggest driver behind this growth was strong demand in North America, which continues to be a core market for the company.

Breaking it down by segment, Products and Systems Integration saw a 3% sales increase, thanks to ongoing demand for land mobile radios and video security solutions. Meanwhile, the Software and Services segment had an even stronger quarter, growing 11%, with all three key technology areas contributing to the gains.

Operating margin improved, reaching 27.0% on a GAAP basis, compared to 25.9% in the same period last year. This was largely helped by a legal settlement recovery, though non-GAAP operating margin was mostly stable at 30.4%.

Earnings per share also ticked up. GAAP EPS landed at $3.56, reflecting a slight 3% increase, while non-GAAP EPS reached $4.04, marking a 4% gain. Cash flow generation remained strong, with Motorola Solutions pulling in $1.1 billion in operating cash flow for the quarter.

Full-Year 2024 Highlights

For the full year, the company brought in $10.8 billion in revenue, an 8% increase over 2023. North America continued to be the biggest growth driver, but both of its major business segments contributed.

The Products and Systems Integration business expanded by 10%, while Software and Services saw a 5% rise in sales. Margins remained healthy, with GAAP operating margin improving to 24.8% from 23.0% in the prior year. Non-GAAP operating margin also saw a boost, climbing to 29.0%.

EPS came in mixed for the year. GAAP EPS dropped 7% to $9.23, but non-GAAP EPS actually grew 16% to $13.84, showing strong underlying performance. The company also delivered record cash flow, generating $2.4 billion, a 17% increase from the prior year.

One of the standout metrics was the order backlog, which reached $14.7 billion by year-end, up 3%. This indicates that demand for Motorola’s solutions remains strong going into 2025.

Looking Ahead

Motorola Solutions is heading into the new year with solid momentum. The growing demand for safety and security solutions, along with a strong order pipeline, puts the company in a good position for continued success. While market conditions can always shift, the company’s steady revenue growth and healthy margins suggest it’s well-prepared for what’s next.

Financial Health and Stability

A stock’s ability to sustain and grow dividends depends on the overall health of the business. Motorola Solutions has a solid financial profile, balancing strong profitability with a capital structure that supports long-term growth.

Key financial metrics show why the company remains in a strong position:

• Profit Margin: 14.58%
• Operating Margin: 27.20%
• Return on Assets: 12.67%
• Return on Equity: 128.72%

The operating margin of 27.20% highlights the company’s ability to generate strong earnings from its revenue, a positive indicator of financial efficiency. Meanwhile, return on equity is exceptionally high at 128.72%, although this is partially inflated by its high debt levels.

From a liquidity standpoint, Motorola Solutions holds $2.1 billion in cash, which provides flexibility in managing operational expenses and dividend payments. The current ratio of 1.28 indicates that it has enough short-term assets to cover its liabilities, adding another layer of financial security.

Revenue continues to trend upward, with year-over-year quarterly growth of 5.70%, reinforcing the company’s stability and ability to sustain dividends.

Valuation and Stock Performance

Motorola Solutions has seen a strong stock price performance, with a 52-week range between $332.98 and $507.82. At its current levels, the stock is trading close to its 50-day moving average of $454.89, suggesting it has cooled off slightly from its highs.

When evaluating valuation:

• Forward Price-to-Earnings Ratio: 28.09
• Trailing Price-to-Earnings Ratio: 45.03
• Price-to-Sales Ratio: 6.56
• Enterprise Value-to-EBITDA: 28.37

The stock is trading at a premium, which reflects investor confidence in the company’s ability to maintain growth. However, a high P/E ratio suggests that expectations are already priced in, meaning future gains may depend on continued revenue and earnings growth.

Despite its valuation, Motorola Solutions has delivered steady revenue growth, which supports its long-term outlook. Investors should weigh whether the stock’s premium pricing is justified based on its consistent financial performance.

Risks and Considerations

Every investment carries risks, and even a strong dividend stock like Motorola Solutions has factors that investors should keep in mind.

1. High Valuation – The stock’s forward P/E ratio of 28.09 is higher than market averages, which could limit future upside if growth slows or if investor sentiment shifts.
2. Debt Load – The company’s debt-to-equity ratio is quite high at 381.09%. While cash flow supports its current obligations, rising interest rates or economic downturns could put added pressure on its financial flexibility.
3. Dividend Yield Compression – The stock price has outpaced dividend growth, resulting in a lower yield than its five-year average. This could make it less attractive for income-focused investors seeking higher yields.
4. Market Sensitivity – Motorola Solutions operates in industries that rely on large-scale government and enterprise contracts. Any slowdown in public safety or infrastructure spending could impact its revenue and profitability.

Final Thoughts

Motorola Solutions offers a solid combination of steady dividends, strong cash flow, and consistent revenue growth. While its 1.05% dividend yield isn’t particularly high, it is backed by strong earnings and disciplined capital allocation.

For investors looking for a reliable dividend stock with a history of consistent payouts and financial stability, this company remains an attractive option. However, its premium valuation and high debt levels are factors worth keeping an eye on.

Those who already hold the stock may appreciate its steady dividend growth and strong market position, while potential new investors might prefer to wait for a more attractive entry point if valuation concerns persist.