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3 Top Stocks From the Thriving Business Information Industry
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Increased adoption and success of the work-from-home trend is enabling the Zacks Business – Information Services industry to cater to the pandemic-driven demand spike for services that ensure risk mitigation, cost reduction and productivity improvement.
Rising technology adoption is benefiting companies like S&P Global Inc. (SPGI - Free Report) , TransUnion (TRU - Free Report) and FactSet Research Systems Inc.(FDS - Free Report) , enabling them to offer digitally-transformed, personalized and value-added services.
About the Industry
The Zacks Business – Information Services industry comprises companies that offer a range of services, including software, data, risks, research, information and analytics solutions. These companies operate in a dynamic business environment characterized by evolving customer behavior, preference and demographics.
Prominent industry players include information-measurement giant Nielsen , ratings, benchmarks, analytics, and data provider S&P Global, critical information and analytics provider IHS Markit and provider of data-analytics solutions Verisk Analytics (VRSK - Free Report) .
3 Trends Shaping the Future of Information Industry
Demand Environment Healthy: The industry is mature and has witnessed a steadily-growing business environment in the past few years. Income and cash flows have grown steadily, enabling most industry players to pay out stable dividends.
Increased Need of Customer-centric Solutions: The coronavirus pandemic has resulted in many-fold increase in demand for specific solutions that ensure risk mitigation, cost reduction and productivity improvement. This, in turn, has increased business opportunities for industry players. These companies are now modifying their business strategies to offer more customer-centric solutions.
Increased Adoption of Technologies: Automation in assembling and use of big data in enhancing business information will boost the industry’s growth in future. Companies are moving from conventional data solutions to technical and domain-specific expertise, data analytics solutions, financial consultancy, and operational consultancy services.
Zacks Industry Rank Indicates Bright Prospects
The Business – Information Services industry is housed within the broader Zacks Business Services sector. It carries a Zacks Industry Rank #51, which places it in the top 20% of more than 250 Zacks industries.
The group’s Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that investors can buy or retain given their growth prospects, let’s take a look at the industry’s recent stock-market performance and current valuation.
Industry Underperforms Sector and the S&P 500
Over the past year, the Zacks Business – Information Services industry has underperformed the S&P 500 composite and the broader sector.
While the industry has declined 1.9%, the S&P 500 composite and the broader sector rallied a respective 11.3% and 2.4%.
One-Year Price Performance
Industry’s Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing business information services stocks, the industry is currently trading at 29.08 compared with the S&P 500’s 21.84 and the sector’s 29.37.
Over the past five years, the industry has traded as high as 30.2X, as low as 19.56X and at the median of 22.63X, as the charts below show.
S&P Global: The company provides ratings, benchmarks, analytics, and data to the capital and commodity markets. Amid the pandemic, successful operations from remote locations, along with productivity programs, have been benefiting its top line. Cost-reduction measures such as hiring freeze, reduction in travel, advertising and promotion expenses, and lowered use of outside professional services have kept its bottom line in good shape.
The Zacks Consensus Estimate for current-year EPS has moved 7.9% north in the past 60 days. The stock has surged 82.7% over the past six months.
Price & Consensus: SPGI
TransUnion: This risk and information solutions provider has a business model that ensures highly recurring and diversified revenue streams. In response to the COVID-19 pandemic, the company continues to follow the work-from-home model, and is trying to be disciplined in managing investment priorities and cost structure. It recently launched the CreditVision Acute Relief Suite, a collection of tools for lenders and insurers to evaluate customers affected by the coronavirus mayhem. The recent acquisition of Signal is expected to bolster TransUnion’s marketing abilities through people-based identity-enabled marketing solutions.
The Zacks Consensus Estimate for ongoing-year EPS has moved up 14.6% in the past 60 days. The stock has gained 44% over the past six months.
Price & Consensus: TRU
FactSet Research Systems: This integrated financial information and analytical applications provider has a business model and investment plan that make its operations more relevant to the challenging situations of today. The company is making investments toward digital transformation, and personalized and value added solutions. Its three-year plan is focused on technology transformation, data creation for private markets and expansion of content for banking. These should help the company expand the client base and further strengthen its foothold in the market in the upcoming period.
The Zacks Consensus Estimate for 2020 EPS has been revised 0.6% upward in 60 days’ time. The stock has appreciated 52.7% over the past six months.
Price & Consensus: FDS
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
3 Top Stocks From the Thriving Business Information Industry
Increased adoption and success of the work-from-home trend is enabling the Zacks Business – Information Services industry to cater to the pandemic-driven demand spike for services that ensure risk mitigation, cost reduction and productivity improvement.
Rising technology adoption is benefiting companies like S&P Global Inc. (SPGI - Free Report) , TransUnion (TRU - Free Report) and FactSet Research Systems Inc.(FDS - Free Report) , enabling them to offer digitally-transformed, personalized and value-added services.
About the Industry
The Zacks Business – Information Services industry comprises companies that offer a range of services, including software, data, risks, research, information and analytics solutions. These companies operate in a dynamic business environment characterized by evolving customer behavior, preference and demographics.
Prominent industry players include information-measurement giant Nielsen , ratings, benchmarks, analytics, and data provider S&P Global, critical information and analytics provider IHS Markit and provider of data-analytics solutions Verisk Analytics (VRSK - Free Report) .
3 Trends Shaping the Future of Information Industry
Demand Environment Healthy: The industry is mature and has witnessed a steadily-growing business environment in the past few years. Income and cash flows have grown steadily, enabling most industry players to pay out stable dividends.
Increased Need of Customer-centric Solutions: The coronavirus pandemic has resulted in many-fold increase in demand for specific solutions that ensure risk mitigation, cost reduction and productivity improvement. This, in turn, has increased business opportunities for industry players. These companies are now modifying their business strategies to offer more customer-centric solutions.
Increased Adoption of Technologies: Automation in assembling and use of big data in enhancing business information will boost the industry’s growth in future. Companies are moving from conventional data solutions to technical and domain-specific expertise, data analytics solutions, financial consultancy, and operational consultancy services.
Zacks Industry Rank Indicates Bright Prospects
The Business – Information Services industry is housed within the broader Zacks Business Services sector. It carries a Zacks Industry Rank #51, which places it in the top 20% of more than 250 Zacks industries.
The group’s Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that investors can buy or retain given their growth prospects, let’s take a look at the industry’s recent stock-market performance and current valuation.
Industry Underperforms Sector and the S&P 500
Over the past year, the Zacks Business – Information Services industry has underperformed the S&P 500 composite and the broader sector.
While the industry has declined 1.9%, the S&P 500 composite and the broader sector rallied a respective 11.3% and 2.4%.
One-Year Price Performance
Industry’s Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing business information services stocks, the industry is currently trading at 29.08 compared with the S&P 500’s 21.84 and the sector’s 29.37.
Over the past five years, the industry has traded as high as 30.2X, as low as 19.56X and at the median of 22.63X, as the charts below show.
Forward 12-month Price-to-Earnings (P/E)
3 Business Information Service Stocks to Consider
We are presenting three stocks that currently carry a Zacks Rank #2 (Buy) and are well positioned to grow in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
S&P Global: The company provides ratings, benchmarks, analytics, and data to the capital and commodity markets. Amid the pandemic, successful operations from remote locations, along with productivity programs, have been benefiting its top line. Cost-reduction measures such as hiring freeze, reduction in travel, advertising and promotion expenses, and lowered use of outside professional services have kept its bottom line in good shape.
The Zacks Consensus Estimate for current-year EPS has moved 7.9% north in the past 60 days. The stock has surged 82.7% over the past six months.
Price & Consensus: SPGI
TransUnion: This risk and information solutions provider has a business model that ensures highly recurring and diversified revenue streams. In response to the COVID-19 pandemic, the company continues to follow the work-from-home model, and is trying to be disciplined in managing investment priorities and cost structure. It recently launched the CreditVision Acute Relief Suite, a collection of tools for lenders and insurers to evaluate customers affected by the coronavirus mayhem. The recent acquisition of Signal is expected to bolster TransUnion’s marketing abilities through people-based identity-enabled marketing solutions.
The Zacks Consensus Estimate for ongoing-year EPS has moved up 14.6% in the past 60 days. The stock has gained 44% over the past six months.
Price & Consensus: TRU
FactSet Research Systems: This integrated financial information and analytical applications provider has a business model and investment plan that make its operations more relevant to the challenging situations of today. The company is making investments toward digital transformation, and personalized and value added solutions. Its three-year plan is focused on technology transformation, data creation for private markets and expansion of content for banking. These should help the company expand the client base and further strengthen its foothold in the market in the upcoming period.
The Zacks Consensus Estimate for 2020 EPS has been revised 0.6% upward in 60 days’ time. The stock has appreciated 52.7% over the past six months.
Price & Consensus: FDS
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>