MCO
Moody's Corporation
Financial Services · Financial Data & Stock Exchanges · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The profitability factor earned a perfect score, anchored by a 31.9% net margin, 43.4% operating margin, and 60.7% return on equity in FY2025.
- The dividend factor scored near the top, supported by four consecutive years of dividend-per-share growth and a conservative 28.5% payout ratio in FY2025.
- Growth and momentum added meaningful but not maximum contributions, reflecting solid but not exceptional revenue expansion and some quarterly unevenness in results.
Why Not Higher
- The theme component contributes zero to the score because Moody's is not currently assigned to any of the 24 tracked macro themes, representing a significant structural gap in the composite.
- The financial health factor scored below the midpoint, and quarterly results showed a notable dip in 2025Q4 revenue and operating income, preventing higher momentum and overall scores.
Data Confidence
9 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew 8.9% from FY2024 to FY2025, while net income rose 19.5% over the same period and diluted EPS increased 21.4% from FY2024 to FY2025.
The model rewarded the accelerating bottom-line expansion — net income and EPS growth well outpacing top-line growth — but the mid-single-digit-to-low-double-digit revenue growth rate likely kept the score from reaching the upper range.
In FY2025, Moody's posted a net margin of 31.9%, an operating margin of 43.4%, and a return on equity of 60.7%.
These metrics reflect exceptional capital efficiency and pricing power; the model awarded a perfect score in recognition of margins and returns that are well above typical thresholds for this factor.
Filing evidence currently available does not support a more specific explanation for this factor.
Over the last four reported quarters, revenue moved from $1,898M in 2025Q2 to $2,007M in 2025Q3, dipped to $1,889M in 2025Q4, then rebounded to $2,079M in 2026Q1. Net income followed a similar pattern — $578M, $646M, $610M, and $661M — as did operating income at $818M, $917M, $770M, and $922M across the same quarters.
The model appears to have rewarded the overall upward trajectory and the strong 2026Q1 readings, while the mid-sequence dip in 2025Q4 likely prevented a higher score by introducing some unevenness in the trend.
Dividends per share have risen consecutively from $2.80 in FY2022 to $3.08 in FY2023, $3.40 in FY2024, and $3.76 in FY2025, while the dividend payout ratio in FY2025 stood at 28.5%.
The model rewarded the consistent multi-year dividend growth alongside a conservative payout ratio that leaves substantial earnings retained, signaling both commitment to shareholder returns and financial flexibility.
Moody's Corporation is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means this component contributes no score; this reflects the model's current classification state and should not be read as a commentary on the company's business quality or outlook.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Moody's Corporation earned a composite score of 68.4/100 with a Medium risk rating and a Research Candidate label, driven by exceptional profitability and a strong dividend track record, partially offset by moderate financial health and the absence of a macro theme assignment. In FY2025, the company posted a net margin of 31.9%, an operating margin of 43.4%, and a return on equity of 60.7%, reflecting outstanding capital efficiency. Revenue grew 8.9% year-over-year while net income and diluted EPS expanded at a faster 19.5% and 21.4% pace respectively, demonstrating meaningful operating leverage. Dividends per share have risen consecutively from $2.80 in FY2022 to $3.76 in FY2025, with a conservative payout ratio of 28.5% leaving ample room for continued capital allocation flexibility.
Plain English
Moody's is a highly profitable business that keeps growing its earnings faster than its revenues and steadily raises its dividend every year, though it carries some debt and doesn't currently fit into any of the model's special investment themes, which holds its overall score back.
Bull Case vs. Bear Case
Bull Case
- Exceptional profitability stands out: Moody's delivered a 43.4% operating margin and 60.7% return on equity in FY2025, metrics that reflect strong pricing power and capital efficiency well above typical thresholds.
- Bottom-line growth is accelerating relative to top-line growth — net income rose 19.5% and diluted EPS climbed 21.4% against 8.9% revenue growth in FY2025, indicating meaningful operating leverage.
- The dividend track record is compelling: dividends per share have grown every year from $2.80 in FY2022 to $3.76 in FY2025, while the 28.5% payout ratio signals both commitment to shareholders and retained financial flexibility.
Bear Case
- Revenue growth in the mid-to-low double digits is solid but not exceptional, and likely capped the growth factor score from reaching the upper range.
- Quarterly results showed some unevenness — revenue dipped from $2,007M in 2025Q3 to $1,889M in 2025Q4 and operating income fell from $917M to $770M over the same period — introducing a degree of trend inconsistency.
- Moody's is not currently assigned to any of the 24 tracked macro themes, meaning the theme component contributes zero to the composite score, a structural drag that limits the overall rating.
What Could Change the Picture
Bullish Triggers
- If quarterly revenue and operating income sustain the strong 2026Q1 levels ($2,079M and $922M respectively) without the mid-sequence dips seen in 2025Q4, momentum scoring could improve meaningfully.
- Assignment to one or more of the model's 24 tracked macro themes would unlock a currently zero-contributing score component and could materially lift the composite rating.
Bearish Triggers
- A deterioration in the debt-to-equity ratio beyond its current FY2025 level of 1.73 could further pressure the financial health score, which is already the weakest contributing factor.
- If revenue growth decelerates and the gap between top-line and bottom-line expansion narrows, the operating leverage story that underpins the growth score would weaken.
Risk Profile
Medium RiskThe financial health factor reflects a debt-to-equity ratio of 1.73 in FY2025, indicating a leveraged balance sheet that warrants monitoring. Quarterly momentum showed a mid-sequence dip — operating income fell from $917M in 2025Q3 to $770M in 2025Q4 — before recovering in 2026Q1, suggesting some variability in near-term earnings cadence.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.