Back to top

Analyst Blog

McGraw Hill Financial, Inc. (MHFI - Analyst Report) could prove to be a solid bet for investors. Ever since the company posted better-than-expected fourth-quarter 2013 results and provided an upbeat guidance (on Feb 4), the Estimate has been trending upwards. For 2014, the Zacks Consensus Estimate has moved to $3.80 from $3.76 and for 2015, it has risen to $4.30 from $4.27, over the last 30 days.

Further, since the earnings release, the stock has garnered a return of nearly 6%. Recently, the stock hit a 52-week high of $82.05 on Feb 14. Additionally, the company’s long-term estimated earnings per share growth rate is 15.5%, which seems achievable.

Investors are impressed by this Zacks Rank #2 (Buy) stock as it posted earnings per share of 81 cents, which rose 12% from the year-ago quarter figure and beat the Zacks Consensus Estimate by a couple of cents. Total revenue increased 2% year over year to $1,250 million, reflecting strong performance across all businesses except the Standard & Poor’s Ratings Services. Moreover, the reported revenues surpassed the Zacks Consensus Estimate of $1,241 million.
Following the strong performance, McGraw Hill now projects adjusted earnings in the range of $3.75–$3.85 per share. Further, the company anticipates revenue growth in mid single digits. In 2014, the company is likely to generate free cash flow worth $1 billion.

McGraw Hill is an attractive pick for investors seeking both growth and income, as the company announced a dividend hike on Jan 29, 2014. Moreover, it raised its quarterly dividend by 7.1% to 30 cents per share (or $1.20 annually) from 28 cents (or $1.12 annually). The new payout will be given on Mar 12, 2014 to stockholders of record on Feb 26.

Additionally, the company is likely to benefit from its strategic investments aimed to generate long-term profitability. The company’s focus on high margin business through proper capital allocation is reaping success.

Further, McGraw Hill’s earnings streak makes investors optimistic about the stock’s future performance. The company has beaten the Zacks Consensus Estimate in the past 4 quarters by an average of 7.5%.

Other better-ranked stocks in the retail sector that warrant a look includes Tribune Co. (TRBAA), The New York Times Co. (NYT - Analyst Report) and Verisk Analytics, Inc. (VRSK - Snapshot Report).  While Tribune carries a Zacks Rank #1 (Strong Buy), both New York Times and Verisk Analytics have a Zacks Rank #2.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
PANTRY INC PTRY 21.02 +2.09%
INTEL CORP INTC 35.15 +1.88%
PIPER JAFFR… PJC 54.54 +1.70%