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Acquisitions Benefit S&P Global (SPGI) Amid Rising Expenses
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S&P Global (SPGI - Free Report) has had an impressive run over the past three months. The stock has gained 14.4% compared with the 11.9% rally of the industry it belongs to and the 6% rise of the Zacks S&P 500 composite.
SPGI has reported impressive second-quarter results. The adjusted EPS (excluding 82 cents from non-recurring items) of $4.04 surpassed the Zacks Consensus Estimate by 10.1% and increased 29.5% year over year. Revenues of $3.5 billion beat the consensus estimate by 3.4% and improved 14.5% year over year.
How is S&P Global Performing?
The growing demand for business information services bodes well for S&P Global. The constant expansion of the volume of data from private and government organizations has escalated the demand for improved enterprise-wide financial performance visibility. Market growth is expected to be driven by the increase in demand for news, information and analytics solutions.
The industry is benefiting from the surging need for risk mitigation. Market dynamics change persistently and keep companies exposed to credit fund and operational risks. Risk mitigation is backed by accurate market and financial information, thus spiking the demand for business information services. We anticipate 9% year-over-year growth in revenues for S&P Global in 2024.
Strategic acquisitions are one of the mediums of growth for SPGI. It assists the company to innovate, expand content and introduce products. In 2023, the company acquired Market Scan Information Systems, Inc. and ChartIQ, which enhanced mobility services and strengthened S&P Global Market Intelligence, respectively. S&P Global acquired the Shades of Green business in 2022 to improve second-party opinions. In the same year, SPGI conducted a merger with IHS Markit, which enhanced data and analytics offerings.
S&P Global’s pursuits to reward its shareholders through share repurchases and dividend payments are noteworthy. In 2023, 2022, and 2021, the company paid out $1.1 billion, $1 billion and $743 million as dividends to the shareholders, respectively. Share repurchases amounted to $3.3 billion and $12 billion in 2023 and 2022, respectively. Efforts as such not only instill investors’ confidence but also positively impact the bottom line.
S&P Global has been witnessing increased expenses due to investments in ongoing productivity programs, higher compensation costs on investments in growth initiatives, and the completion of acquisitions and higher incentive costs. During 2023, total expenses increased 3.4% year over year. As a result, the bottom line is expected to remain under pressure, going forward.
Zacks Rank & Stocks to Consider
S&P Global currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Acquisitions Benefit S&P Global (SPGI) Amid Rising Expenses
S&P Global (SPGI - Free Report) has had an impressive run over the past three months. The stock has gained 14.4% compared with the 11.9% rally of the industry it belongs to and the 6% rise of the Zacks S&P 500 composite.
SPGI has reported impressive second-quarter results. The adjusted EPS (excluding 82 cents from non-recurring items) of $4.04 surpassed the Zacks Consensus Estimate by 10.1% and increased 29.5% year over year. Revenues of $3.5 billion beat the consensus estimate by 3.4% and improved 14.5% year over year.
How is S&P Global Performing?
The growing demand for business information services bodes well for S&P Global. The constant expansion of the volume of data from private and government organizations has escalated the demand for improved enterprise-wide financial performance visibility. Market growth is expected to be driven by the increase in demand for news, information and analytics solutions.
The industry is benefiting from the surging need for risk mitigation. Market dynamics change persistently and keep companies exposed to credit fund and operational risks. Risk mitigation is backed by accurate market and financial information, thus spiking the demand for business information services. We anticipate 9% year-over-year growth in revenues for S&P Global in 2024.
Strategic acquisitions are one of the mediums of growth for SPGI. It assists the company to innovate, expand content and introduce products. In 2023, the company acquired Market Scan Information Systems, Inc. and ChartIQ, which enhanced mobility services and strengthened S&P Global Market Intelligence, respectively. S&P Global acquired the Shades of Green business in 2022 to improve second-party opinions. In the same year, SPGI conducted a merger with IHS Markit, which enhanced data and analytics offerings.
S&P Global Inc. Revenue (TTM)
S&P Global Inc. revenue-ttm | S&P Global Inc. Quote
S&P Global’s pursuits to reward its shareholders through share repurchases and dividend payments are noteworthy. In 2023, 2022, and 2021, the company paid out $1.1 billion, $1 billion and $743 million as dividends to the shareholders, respectively. Share repurchases amounted to $3.3 billion and $12 billion in 2023 and 2022, respectively. Efforts as such not only instill investors’ confidence but also positively impact the bottom line.
S&P Global has been witnessing increased expenses due to investments in ongoing productivity programs, higher compensation costs on investments in growth initiatives, and the completion of acquisitions and higher incentive costs. During 2023, total expenses increased 3.4% year over year. As a result, the bottom line is expected to remain under pressure, going forward.
Zacks Rank & Stocks to Consider
S&P Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Evertec (EVTC - Free Report) and FactSet Research Systems (FDS - Free Report) .
Evertec flaunts a Zacks Rank of 1 (Strong Buy) at present. EVTC has a long-term earnings growth expectation of 8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
EVTC delivered a trailing four-quarter earnings surprise of 11.1%, on average.
FactSet Research currently carries a Zacks Rank of 2 (Buy). The company has a long-term earnings growth expectation of 10.3%.
FDS delivered a trailing four-quarter earnings surprise of 1.6%, on average.