Stock (Symbol) |
S&P Global (SPGI) |
Stock Price |
$132 |
Sector |
| Finance |
Data is as of |
| March 13, 2017 |
Expected to Report |
| Apr 24 – 28 |
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’s products cater to the capital markets, which includes asset managers, investment banks, commercial banks, exchanges and issuers; the commodities markets, which includes producers, traders and intermediaries within energy, metals, petrochemicals and agriculture, and the commercial markets, which includes professionals and corporate executives within automotive and marketing/research information services. 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. The Company serves through a range of products and services available through both third-party and distribution channels. Source: Thomson Financial |
Sharek’s Take |
 For more than 150 years S&P Global (SPGI) 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. It now has has four divisions: S&P Global Ratings (46% of 2015 sales), S&P Global Market Intelligence (26%), S&P Dow Jones Indicies (11%) and S&P Global Platts (18%). S&P Global has raised profit margins by digesting itself of the low-margin divisions, then and has used these funds for stock repurchases. Although sales grew just 7% in 2016, profits grew 18%. SPGI is a good stock for conservative investors, and is one of fewer than 25 companies in the S&P 500 to have increased their dividend for at least the last 44 years (with a compounded annual growth rate of 10% per year since 1974). I’m looking to add this stock to the Conservative Portfolio. Analysts have an Estimated Long-term Growth Rate of 12% per year on the stock in addition to the 1% yield, but with a P/E of 22 I will wait for a better buying opportunity |
One Year Chart |
 Last qtr S&P delivered sales growth of 2% and profit growth of 23%, which beat the 14% estimate. Right now profit growth is expected to slow to 13%, 10%, 8% and 20% the next 4 qtrs but The company has handily beaten the street for the last 4 qtrs now, so we’ll see. These Estimates could get beaten. |
Fair Value |
 My Fair Value on this stock is 21x earnings, which is $126 for 2017. With the stock at $132, there’s no rush to buy. I feel the strong equty markets have pushed this stock up in recent months. But now the stock market is leveling off, which might mean better prices for stocks this Spring & Summer. |
Bottom Line |
 S&P Global seems to be a solid stock that many investors are unaware of. 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. SPGI has a good Est. LTG of 12% per year plus a 1% yield with a dividend that’s increased since the 1970s. But with the stock selling above my 2017 Fair Value I’ll keep it on my radar and look for a better buying opportunity to add it to the Conservative Portfolio. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
