Motorola (MSI) Rewards Shareholders With 11% Dividend Hike
Motorola Solutions, Inc. MSI recently announced an 11% year-over-year hike in its quarterly dividend payout. The proposed dividend of 98 cents per share or $3.92 on an annualized basis is payable on Jan 12, 2024, to shareholders on record as of Dec 15, 2023.
Based on the closing price of $317.26 on Nov 16, the proposed dividend affirms a yield of 1.2%. A steady dividend payout is part of the long-term strategy of Motorola to provide attractive risk-adjusted returns to its stockholders. In addition, healthy dividend increases at periodic intervals have been one of its strengths.
Management further increased its share repurchase authorization by an additional $2 billion to $18 billion. The company had approximately $599 million worth of shares remaining under its previous share repurchase authorization at the end of the third quarter of 2023.
Motorola is poised to gain from robust organic growth, disciplined capital deployment and strong demand across land mobile radio products, services and software. 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 is expanding its software offerings to provide solutions across the various segments of the public safety workflow.
As a leading provider of mission-critical communication products and services worldwide, Motorola has ensured a steady revenue stream from this niche market. The communications equipment maker intends to boost its position in the public safety domain by entering into strategic alliances with other players in the ecosystem.
Motorola expects healthy demand trends across video security and services, land mobile radio products and related software. These systems drive the demand for additional device sales and promote software upgrades and infrastructure expansion. The comprehensive suite of services ensures continuity and reduces risks related to critical communications operations.
With solid third-quarter results and robust demand patterns, Motorola raised its earlier guidance for 2023. Non-GAAP earnings are currently expected in the $11.65-$11.70 per share range, up from $11.40-$11.48 on revenues of $9.930 billion to $9.945 billion, up from $9.875 billion to $9.900 billion estimated earlier, with a rise in both segments on higher demand.
All these positive drivers and sound financial management probably helped the company to increase its quarterly dividend.
Zacks Rank and Key Picks
Motorola currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. ANET, carrying a Zacks Rank #2 (Buy), is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 20.4% and delivered an earnings surprise of 12%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
United States Cellular Corporation USM, sporting a Zacks Rank #1, is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve efficiency of government operations.
U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology. The company is well-positioned for continued demand for broadband.
Comtech Telecommunications Corp. CMTL, carrying a Zacks Rank #2, is another solid pick. Headquartered in Melville, NY, the company is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers.
Comtech’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable its customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data.
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