Post by Fearchar on Jan 28, 2023 12:48:13 GMT
SPGI doesn't tend to receive a lot of press. However, it's a very well run company.
It started about a hundred years ago as McGraw Hill, a publisher of text books and it's where my Grandfather worked. Eventually, they decided to branch out and acquired Standard and Poors, which published financial data. That made sense as a way to grow. While the text book printing business fell off, licensing revenue from the S&P index took off and they also had good earnings as a rating agency. So, they changed their name. When the 2009 financial crisis hit, it devastated a number of rating agencies, but that only allowed SPGI to gain market share. More recently, they completed and are currently working thru a huge merger, which I believe is why New Constructs is currently giving them poor grades. However, at Seeking Alpha, there are a number of very bullish analysis available.
The stock does not pay a huge dividend and never really did. But they have increased that dividend almost yearly for the past 50 years. More over when times are right, they buy back their shares. The result has been awesome total returns over the decades. The current 36 month correlation with VOO is 0.68. So, it should be excellent as a diversifier provided one is buying at the right price.
As many people realize, Artificial Intelligence (AI) is coming. However, for AI to be useful, it need information and SPGI is well positioned to benefit. So, while there is some risk that the looming recession could hurt their business, over the longer term, they should grow. I recommend buying shares at the current price of $373, especially in taxable accounts with long term horizons. $400 is probably a good target price over the next year.
It started about a hundred years ago as McGraw Hill, a publisher of text books and it's where my Grandfather worked. Eventually, they decided to branch out and acquired Standard and Poors, which published financial data. That made sense as a way to grow. While the text book printing business fell off, licensing revenue from the S&P index took off and they also had good earnings as a rating agency. So, they changed their name. When the 2009 financial crisis hit, it devastated a number of rating agencies, but that only allowed SPGI to gain market share. More recently, they completed and are currently working thru a huge merger, which I believe is why New Constructs is currently giving them poor grades. However, at Seeking Alpha, there are a number of very bullish analysis available.
The stock does not pay a huge dividend and never really did. But they have increased that dividend almost yearly for the past 50 years. More over when times are right, they buy back their shares. The result has been awesome total returns over the decades. The current 36 month correlation with VOO is 0.68. So, it should be excellent as a diversifier provided one is buying at the right price.
As many people realize, Artificial Intelligence (AI) is coming. However, for AI to be useful, it need information and SPGI is well positioned to benefit. So, while there is some risk that the looming recession could hurt their business, over the longer term, they should grow. I recommend buying shares at the current price of $373, especially in taxable accounts with long term horizons. $400 is probably a good target price over the next year.