So far this year, the S&P 500 has dropped as much as 16% from its highs by April, only to rally and gain all but 4 of these percentage points back.
Whether it's tariff concerns, an uncertain housing market, lower consumer confidence, or the implications of artificial intelligence (AI) disrupting the workforce, there is no shortage of news to spook investors.
However, with this turbulence comes opportunity. This notion could be especially true if investors expand their time frame and remember to look at stocks through a three-year lens (if not one that's decades-long).
I believe public safety leader Motorola Solutions (NYSE: MSI) could prove to be one of these promising opportunities, particularly with its stock down 19% due to overblown tariff concerns.
Here's what sets this magnificent S&P 500 dividend growth stock apart and why it could be an excellent pick in today's uncomfortable market.
Motorola's many layers of safety
Motorola is a leader in the public safety niche, and its stock has been an eight-bagger over the last 10 years. It sells equipment for land-mobile radio (LMR) communication (walkie-talkies for police, for example), fixed and mobile video security and access control (including police body cameras), and command center solutions for 911 services.
The company also sells software and services that support each of these units, which now equal 36% of total revenue.
Image Source: Getty Images.
Recession-resilient products
With 5 million cameras deployed across 300,000 sites, 13,000 LMR networks set up worldwide, and a presence in 60% of the 911 call centers in the United States, Motorola has a massive role within public safety. Just as importantly, its products serve some of the most essential customer bases.
The company gets 70% of its sales from public safety agencies like police, fire, EMS, national security, and crucial infrastructure. The remaining 30% comes from private enterprises, most of which are also essential, like hospitals, utilities, schools, and manufacturers.
Motorola's redundant and "always on" LMR networks are essential to public safety, especially during natural disasters when cell towers may be down. Its police body cameras, fixed cameras for combating shoplifting, and 911 command center equipment are also must-haves, rounding out the company's suite of recession-resilient products.
Its multiyear LMR contracts, the recurring revenue from its software and services, and its all-important customer base offer investors a lot of stability.
Robust and rising free cash flow
The recurring revenue from its software and services grew from 21% of sales in 2015 to 36% today. This increase is noteworthy to investors because these cloud-based services come with much higher margins. Since 2016, the company's free cash flow (FCF) margin rose from 13% to 21% in 2025.
This improved FCF generation adds another layer of safety for investors thinking of buying Motorola, providing financial resilience and the ability to continue funding its dividend. Its ballooning FCF also funds Motorola's penchant as a successful serial acquirer.
Masterful M&A
Since 2015, Motorola spent $7 billion buying 29 businesses across each of the company's three product verticals. Though mergers and acquisitions (M&A) aren't typically seen as a safety feature for most stocks -- if anything, they're usually a significant risk -- management has a lengthy track record of success.
The company currently has a cash return on invested capital (ROIC) of 31%, placing it in the top 10% among its S&P 500 peers. This means Motorola earns outsized cash returns from the debt and equity it devotes to acquisitions, proving its mastery at scooping up and integrating new businesses.
This allows the company to diversify its products and services, fortifying its position as the top dog in the public safety space.
Image Source: Getty Images.
The dividend looks poised to keep going higher
Though Motorola's 1% dividend yield may not scream "lifetime passive income," its dividend growth does. With 12 consecutive years of payout increases, the company's passive income potential could prove to be massive.
To give some context to this steadily growing dividend, investors who purchased the stock in 2012 would now be receiving a 9% yield compared to their original cost basis.
Said another way, dividend growth stocks like Motorola often become high-yield dividend stocks if held long enough. Looking a decade down the road, I'm hoping to re-create these results.
Best yet for investors, the company's dividend payments should keep rising for years to come, for two key reasons. First, it currently only uses 30% of its FCF for its dividend payments, leaving plenty of wiggle room for future increases. Management could technically double its dividend payments tomorrow and still have excess cash for capital expenditures and M&A activity.
Second, the company's backlog continues to skew more heavily toward higher-margin software and services sales. This shift means that its FCF and margins could continue increasing, creating even more cash to return to shareholders over time.
Backed by the company's safe and stable operations, this steadily growing dividend makes Motorola one of my favorite investments for growing my long-term passive income, especially in a volatile market.
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
