Stock (Symbol) |
S&P Global (SPGI) |
Stock Price |
$151 |
Sector |
| Finance |
Data is as of |
| August 23, 2017 |
Expected to Report |
| Nov 1 |
Company Description |
 S&P Global Inc., formerly McGraw Hill Financial, Inc., is a provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets across the world. The Company operates its business through four segments: Standard & Poor’s Ratings Services (S&P Ratings), S&P Global Market Intelligence, S&P Dow Jones Indices (S&P DJ Indices) and S&P Global Platts. Source: Thomson Financial |
Sharek’s Take |
 S&P Global (SPGI) is flying high as people herd into the S&P 500. For more than 150 years S&P Global has been providing financial information and analytics. In 1860 Standard & Poor’s founder Henry Varnum Poor published History of Railroads and Canals in the United States which made public previously undisclosed financial statistics of railroads. Meanwhile during 1899-1909 James McGraw and John Hill started their own trade publishing companies, which were merged in 1917 following Hill’s death. McGraw-Hill went public in 1929 and in 1966 it acquired Standard & Poor’s, which had been publishing a version of the S&P 500 since the 1920s. In 1986 the company become the largest education publisher in the US, but in 2013 that all changed as the company sold off the entire educational division and bought back 18% of its company shares that year. Last year McGraw-Hill divested itself of J.D. Power, the Equity & Fund Research business, and changed its name to S&P Global to better describe the company’s focus on financials. SPGI now has has four divisions:
SPGI is a fairly safe stock with an Est. LTG of 13% and a yield of 1%. It is one of fewer than 25 companies in the S&P 500 to have increased its dividend for at least the last 44 years (with a compounded annual growth rate of 10% per year since 1974). The company has been public almost 100 years and its index-based information is needed for passive index-based investments that follow the S&P Dow Jones Indices. That division 20% sales growth last qtr. The S&P 500 had assets bubble up 38% in the past year. That’s a lot — and I’m cautious on the S&P 500 as P/Es are high by historical standards and stock pickers like me can find better deals. Thus I’m looking to buy this stock, but want it to come down a bit first. |
One Year Chart |
 Great looking one-year chart, outside the P/E of 24 which is in red because I feel that’s high. Last qtr sales grew 1% but that was reduced from SPGU selling off some segments. Each current division had 10% or more sales growth. Profits rose 19% which whipped estimates of 8%. But estimates didn’t rise much after the beat, which was the 2nd big beat in a row. Qtrly profit Estimates are 6%, 16%, 5% and 6% but I bet S&P will beat those numbers — especially with the stock market doing well. |
Fair Value |
 I want to point out the P/E of 24 is higher than the median P/E the stock’s had in every year of the past decade. My Fair Value is 21x earnings or $133 a share. |
Bottom Line |
 S&P Global has been a great stock since March 2009 — which is one year after this bull market began. But note the stock’s angle has gotten higher the past two years even though profits have only grown in the teens. I love this stock for conservative investors, but feel it’s a tad high after a nice runup. I’m also cautious on the S&P 500 as I feel dumb investors have now climbed aboard. I’ll look to get SPGI if the stock dips. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
