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Motorola Solutions Hits 52-Week High: Is More Upside Left?

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Shares of communications equipment manufacturer, Motorola Solutions, Inc. (MSI - Free Report) scaled a new 52-week high of $110.93 in yesterday’s trading session, before closing a tad lower at $110.65. The stock reflected a healthy one-year return of 32.8%, significantly outperforming the industry’s gain of 12% over the same time frame.



Growth Drivers

Motorola remains focused on providing public safety and secure and reliable mission critical communications to commercial customers. Its business evolution formula includes organic and inorganic investments in three major areas: 

Continued innovation in standards-based voice and data solutions spanning APCO 25, TETRA, DMR and LTE Technologies; managed and support services offerings, leveraging global installed base while allowing customers to improve performance; software solutions to support the entire public safety workflow from the command center to mobile applications in the field to post-incident analytics.

The company's growth-by-acquisition strategy has broadened its product portfolio. With increased focus on long-term growth, Motorola successfully closed the acquisition of Avigilon Corporation, a provider of advanced end-to-end security and surveillance solutions, in an all-cash transaction. Prior to this, it completed the buyout of Plant Holdings, Inc., the parent company of Airbus DS Communications, thereby expanding its software portfolio in the Command Center with additional solutions for Next Generation 9-1-1.

Motorola’s efforts to reward its investors through dividend payments and buybacks look impressive. The company bought back shares worth $125 million and paid $76 million in dividends in the fourth quarter of 2017. This indeed reaffirms Motorola’s commitment to create value for its shareholders owing to its strong financial condition.

Also, as the public safety market continues to embrace software offerings to enhance workflows, Motorola is able to sell cloud-first SaaS offerings in addition to on-premise solutions with ancillary implementation and managed services. The company continues to expand its software offerings to provide solutions across the various segments of the public safety workflow.

With continued growth impetus and core focus, the Zacks Rank #3 (Hold) stock is anticipated to hit new 52-week milestones in 2018.

Stocks to Consider

Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , BlackBerry Limited (BB - Free Report) and China Mobile Limited (CHL - Free Report) . While Comtech Telecommunications and BlackBerry sport a Zacks Rank #1 (Strong Buy), China Mobile carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

Comtech Telecommunications has an expected long-term earnings growth rate of 5%. It topped earnings estimates in each of the trailing four quarters, with an average of 111.4%.         

BlackBerry has an expected long-term earnings growth rate of 18.6%. It exceeded earnings estimates twice in the trailing four quarters, with an average of 500%.    

China Mobile has an expected long-term earnings growth rate of 5%.

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