S&P 500 component Motorola Solutions Inc. (NYSE: MSI) is within 1% of a buy point, getting a boost on July 12 along with the broader market. 

A look at the Motorola Solutions chart shows the stock forming a shallow consolidation that began on May 19, after notching gains in February, March and April.

This isn’t necessarily the fastest-moving stock, but it’s been a reliably steady grower, in a business that’s getting more attention: Public safety and security at industrial facilities.

Motorola Solutions’ year-to-date return is 15.66%, and the stock is up 40.42% on a one-year basis. Over rolling three, five, 10, and 15-year time frames, the stock has posted strong double-digit returns.

Not The Motorola You May Remember

Forget about those old Motorola Razr flip phones that were all the rage before iPhones came along; that business line was sold to China-based manufacturer Lenovo in 2014. Today’s Motorola Solutions is a leader in the world of public safety electronics gear and software systems.

The company’s business is organized into three units: 

• Land Mobile Radio Communications: Two-way radio and broadband, devices for public safety and industrial use. 
• Video: Cameras, access control, video software, and AI-enabled analytics. 
• Command Center: Software suite that enables collaboration and shares information throughout the public safety workflow.

Motorola says its strategy “is to generate value through the integration of critical communications, video security, access control and data and analytics.” It aims to remove silos between systems while streamlining and simplifying operations for customers. Across all three business units, its products offer cloud-based applications and cybersecurity services. 

Competitors, depending on the business unit, include BK Technologies Corp. (NYSEAMERICAN: BKTI), L3 Harris Technologies Inc. (NYSE: LHX), Axon Enterprise Inc. (NASDAQ: AXON), Spectrum Brands Holdings Inc. (NYSE: SPB) and Tyler Technologies Inc. (NYSE: TYL). 

Motorola Systems’ largest customers are U.S. government agencies, including the armed services, and the Home Office of the United Kingdom,  with each representing approximately 7% of net sales in 2022. 

Sales Higher In Second Half Of Year 

Due to customer purchasing patterns and the cyclical nature of the markets Motorola serves, sales tend to be somewhat higher in the second half of the year, with the fourth quarter being the highest. That was certainly true in 2021 and 2022, when sales growth accelerated on a sequential basis quarter-by-quarter.

Year-over-year sales have also been growing, with the company posting double-digit increases in the past three quarters. 

A look at the Motorola Systems analyst ratings shows a consensus view of “hold.” Although this company has a market capitalization of $49.78 billion, it’s not the subject of much analyst attention, likely because it’s not in a glamor industry, such as infotech or biotech. In addition, it’s not a long-established institutional stalwart like Walmart Inc. (NYSE: WMT) that’s a “must have” in any large cap growth-and-income portfolio.

Higher Price Targets

Since Motorola’s most recent quarterly report, in early May, analysts at Barclays and Jefferies Financial Group boosted their price targets on the stock. 

MarketBeat’s Motorola Solutions earnings data show the stock beating top and bottom-line views in each of the past five quarters. 

The current area of price consolidation can be categorized as a flat base, since it’s corrected only 8% from peak to trough. That’s encouraging, as it shows institutional investors haven’t been running for the exits, but taking some profits after a solid run-up in the past year.

Returning Capital To Shareholders

Motorola Solutions' dividend yield is 1.18%, with an annual payout of $3.52. The company has an 11-year track record of boosting the shareholder payout. 

The company also has a share repurchase program, whose current yield is 0.71. In the first quarter, the company repurchased $140 million in shares. Companies buy back shares to increase shareholder value, signal confidence in their own financial condition and market position, reduce dilution, improve earnings per share, and utilize excess cash.

For Motorola Solutions, which is an electronics company but not a red-hot, fast-growing tech, share buybacks and dividend payments are a way of attracting investors who have an eye on income and stability.