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Here's Why You Should Retain S&P Global (SPGI) Stock for Now
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S&P Global Inc. (SPGI - Free Report) is currently aided by strategic acquisitions and investor-friendly steps. However, decreasing current ratio is worrisome.
SPGI has an expected long-term earnings per share (three to five years) growth rate of 12%. Revenues are anticipated to register growth of 47% and 10.6% in 2022 and 2023, respectively.
Factors That Augur Well
Acquisition is a key growth strategy for S&P Global and helps it continuously innovate, increase differentiated content and develop new products. The recent acquisition of IHS Markit is expected to enhance S&P Global’s data and analytics offerings. It is anticipated to be accretive to SPGI’s earnings by the end of the second year post closing. Another acquisition, The Climate Service, is expected to enhance SPGI's portfolio of essential environmental, social and governance (ESG) insights and solutions’ capabilities. This should help SPGI modify its climate data, models and analytics-related offerings.
We are impressed with S&P Global’s endeavors to reward its shareholders through share repurchases and dividend payments. During 2021, S&P Global returned $743 million to its shareholders in the form of dividend payments. In 2020, SPGI returned $1.8 billion to its shareholders, which includes $1.2 billion through share repurchases and $645 million as dividend payments. In 2019, S&P Global returned $1.8 billion to its shareholders with $1.2 billion as share repurchases and $560 million as dividend payments. Such moves indicate SPGI’s commitment to create shareholder value and underline its confidence in its business.
Recently, on Jun 22, the board of directors announced a quarterly cash dividend of 85 cents per share (annualized: $3.32). The dividend will be paid out on Sep 12 to shareholders of record as of Aug 26.
Some Risks
S&P Global’s current ratio (a measure of liquidity) at the end of first-quarter 2022 was pegged at 1.38, lower than the current ratio of 2.31 reported at the end of fourth-quarter 2021 and the prior-year quarter’s 1.85. Decreasing current ratio is not desirable as it indicates that a company may have problems meeting its short-term debt obligations.
The stock has lost 17.2% over the past year compared with the 16.9% decline of the industry it belongs to.
Image: Bigstock
Here's Why You Should Retain S&P Global (SPGI) Stock for Now
S&P Global Inc. (SPGI - Free Report) is currently aided by strategic acquisitions and investor-friendly steps. However, decreasing current ratio is worrisome.
SPGI has an expected long-term earnings per share (three to five years) growth rate of 12%. Revenues are anticipated to register growth of 47% and 10.6% in 2022 and 2023, respectively.
Factors That Augur Well
Acquisition is a key growth strategy for S&P Global and helps it continuously innovate, increase differentiated content and develop new products. The recent acquisition of IHS Markit is expected to enhance S&P Global’s data and analytics offerings. It is anticipated to be accretive to SPGI’s earnings by the end of the second year post closing. Another acquisition, The Climate Service, is expected to enhance SPGI's portfolio of essential environmental, social and governance (ESG) insights and solutions’ capabilities. This should help SPGI modify its climate data, models and analytics-related offerings.
We are impressed with S&P Global’s endeavors to reward its shareholders through share repurchases and dividend payments. During 2021, S&P Global returned $743 million to its shareholders in the form of dividend payments. In 2020, SPGI returned $1.8 billion to its shareholders, which includes $1.2 billion through share repurchases and $645 million as dividend payments. In 2019, S&P Global returned $1.8 billion to its shareholders with $1.2 billion as share repurchases and $560 million as dividend payments. Such moves indicate SPGI’s commitment to create shareholder value and underline its confidence in its business.
Recently, on Jun 22, the board of directors announced a quarterly cash dividend of 85 cents per share (annualized: $3.32). The dividend will be paid out on Sep 12 to shareholders of record as of Aug 26.
Some Risks
S&P Global’s current ratio (a measure of liquidity) at the end of first-quarter 2022 was pegged at 1.38, lower than the current ratio of 2.31 reported at the end of fourth-quarter 2021 and the prior-year quarter’s 1.85. Decreasing current ratio is not desirable as it indicates that a company may have problems meeting its short-term debt obligations.
The stock has lost 17.2% over the past year compared with the 16.9% decline of the industry it belongs to.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
S&P Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) ) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.
Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.
Genpact carries a Zacks Rank of 2 at present. G has a long-term earnings growth expectation of 12.3%.
Genpact delivered a trailing four-quarter earnings surprise of 13.3%, on average.
CRA International carries a Zacks Rank #2 (Buy), currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.