Motorola Solutions is a solid value play in public safety with strong margins and shareholder returns, suitable for a portfolio alongside or instead of high-growth peers.

Motorola is significantly bigger, not growing as fast, but is definitely a company that you should be aware of, especially before making any portfolio decisions on either of these companies at this point.

So we're gonna dig deep, look at both of them, compare them, as well as some other adjacent companies in this, we'll call it public safety sector.

But the overlap between Motorola and Axon. Motorola Solutions, as Kasey was saying, far and away the bigger business in terms of revenue. Here's the most recent quarter toggle.

Over three times the revenue on a quarterly basis. $3.1 billion for Motorola versus $904 million for Axon.

In terms of size, Motorola gets highlighted here as the winner. But in revenue growth, 13% year over year for Motorola, 35% for Axon.

And then Motorola has also led the investment in this company called Brinc. Their goal at Brinc is to put a drone on every single police station in the country, which is around 80,000 police stations or police centers, and get those drones to be able to be deployed in these emergency situations.

But Motorola is actually helping lead the charge as well, maybe making some less aggressive investments, and that's notable. So Motorola, don't ignore that one. Not a secular growth trend leader in terms of growth, but most definitely making investments in technology.

You can see that Motorola actually leads in a lot of categories that may matter to investors, if you're more of a value-oriented investor. So it's Motorola that actually is almost 26% operating margin.

Free cash flow margin is down from where it is historically, a bit. They're making investments as well, but robustly profitable.

And so this one is worth consideration if you're trying to get in on the public safety industry, which we did an industry stock list on. Axon at the top of this list, followed by Motorola.

This is what Nick was talking about, their products and system integration up 15%, software and services up 10%. This mission critical networks, MCN, up 14%, that is all of the command center software that they have for 911 services.

And other inter-connected hardware that integrates with that. Video security up 12%, command center up 14%.

So, not this huge revenue growth that you're seeing with Axon, but Motorola is a much more mature company. They repurchased $326 million worth of shares in this most recent quarter, so helping shareholders out.

And they paid $201 million in dividends to shareholders. A very shareholder friendly business.

They entered into a agreement to acquire Defend Solutions, which again, is another drone technology company. Motorola obviously seeing the value in investing in this drone technology.

Okay, here's the quarterly segment KPI for products and systems, and then there are software and services. Software and services would be the command center software. So on a quarterly basis, both segments growing at a pretty nice pace.

Low teens CAGR the last few years. They also further segment this out between that MCN, mission critical networks, the video revenue, that would be things like the body cameras and command center revenue.

That mission critical network's far and away the largest revenue segment, but the growth driver coming from these other areas, especially the command center software.

Let's do a reverse DCF on each. I opened this up within an investment thesis checklist on Motorola. And earnings per share and free cash flow per share are a little off from each other, but not too much.

This is no doubt the timing of cash flows. Motorola in one of its slides said that they had a big quarter in fulfilling hardware delivery, so that's probably why there's a bit of elevated free cash flow.

Let's just leave it at a 50/50 split and see what gets this to fair value. Let's start with 10 years. Let's drop the terminal rate down to 4%. And so the first 10 years CAGR, about 12 to 13%.

Let's call it 12 and a half percent average per share profit growth gets Motorola at a fair value today.

This company has actually been a pretty good compounder. Long forgotten since the dot-com bubble boom and then bust. Have done a lot of spinoffs of their business, whittled things down to a public safety company servicing police stations, fire stations, emergency, 911, and all signs point to this perhaps continuing to be a pretty decent compounder in this market.

So 12 to 13%, maybe this is the value stock that you're looking for within public safety.

Watchlist, let's say mature growth because it is definitely growing its revenue at a low teens rate. I would go with mature growth. And let's call this a good value stock, alternative to Axon or part of a public safety basket of stocks.

Under 10 times price to sales, given the company's fast pace of growth and scooping up lots of market share at Motorola's expense, it looks like a reasonable nibble , a small add to the portfolio.