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Near-Term Outlook for Business Information Services Bright
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The Zacks Business – Information Services industry comprises companies that offer a range of services including software, data, risks, research, information and analytics solutions.
Prominent industry players include information-measurement giant Nielsen , ratings, benchmarks, analytics, and data provider S&P Global Inc.(SPGI - Free Report) , critical information and analytics provider IHS Markit Ltd. and provider of data analytics solutions Verisk Analytics (VRSK - Free Report) . These companies operate in a dynamic business environment characterized by changing customer behavior, preference and demographics.
Here are the industry’s three major themes:
The industry is mature with revenues mostly driven by paid content, either through subscription or transaction (pay-per-view). Revenues, income and cash flows are growing steadily over the past few years enabling most industry players to pay out stable dividends.
Rising demand for risk mitigation services is currently a major growth driver for the industry. Changes in market dynamics are more or less a constant phenomenon, exposing companies to credit, funds and operational risks. Accurate market and financial information are required for risk mitigation, spurring demand for business information services.
Automation in assembling and use of big data in enhancing business information should drive the industry’s growth. The companies are shifting 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 Zacks Business – Information Services industry is housed within the broader Zacks Business Services sector. It carries a Zacks Industry Rank #74, which places it in the top 29% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term growth prospects. 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 you may want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and current valuation.
Industry Outperforms Sector and S&P 500
Over the past year, the Zacks Business – Information Services industry has outperformed the Zacks S&P 500 composite and the broader sector.
While the industry has gained 19.2%, the broader sector and the Zacks S&P 500 composite have increased 8.5% and 0.1%, respectively.
Chart: One Year Price Performance
Industry’s Current Valuation
On the basis of 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 27.15 compared with the S&P 500’s 16.72 and the sector’s 24.4.
Over the past five years, the industry has traded as high as 27.15X, as low as 19.42X and at the median of 21.74X.
Chart: Forward 12-month Price-to-Earnings (P/E)
Bottom Line
The industry is a great area to invest in right now. It looks well poised for growth on the back of rising demand for information, analytics solution and risk mitigation, and increasing volume of data from private and government organizations.
So while the more cautious of us might wait for a better entry point, here are some stock picks for the rest.
Recruit Holdings Co.’s (RCRRF - Free Report) stock alsocarries a Zacks Rank #2. The Zacks Consensus Estimate for the company’s fiscal 2020 earnings has improved 6.7% in the past 60 days.
Price and Consensus: RCRRF
Nielsen’s stock carries a Zacks Rank #2. The Zacks Consensus Estimate for the company’s 2019 earnings has improved 2.9% in the past 60 days.
Price and Consensus: NLSN
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Near-Term Outlook for Business Information Services Bright
The Zacks Business – Information Services industry comprises companies that offer a range of services including software, data, risks, research, information and analytics solutions.
Prominent industry players include information-measurement giant Nielsen , ratings, benchmarks, analytics, and data provider S&P Global Inc. (SPGI - Free Report) , critical information and analytics provider IHS Markit Ltd. and provider of data analytics solutions Verisk Analytics (VRSK - Free Report) . These companies operate in a dynamic business environment characterized by changing customer behavior, preference and demographics.
Here are the industry’s three major themes:
Zacks Industry Rank Indicates Bright Prospects
The Zacks Business – Information Services industry is housed within the broader Zacks Business Services sector. It carries a Zacks Industry Rank #74, which places it in the top 29% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term growth prospects. 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 you may want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and current valuation.
Industry Outperforms Sector and S&P 500
Over the past year, the Zacks Business – Information Services industry has outperformed the Zacks S&P 500 composite and the broader sector.
While the industry has gained 19.2%, the broader sector and the Zacks S&P 500 composite have increased 8.5% and 0.1%, respectively.
Chart: One Year Price Performance
Industry’s Current Valuation
On the basis of 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 27.15 compared with the S&P 500’s 16.72 and the sector’s 24.4.
Over the past five years, the industry has traded as high as 27.15X, as low as 19.42X and at the median of 21.74X.
Chart: Forward 12-month Price-to-Earnings (P/E)
Bottom Line
The industry is a great area to invest in right now. It looks well poised for growth on the back of rising demand for information, analytics solution and risk mitigation, and increasing volume of data from private and government organizations.
So while the more cautious of us might wait for a better entry point, here are some stock picks for the rest.
S&P Global’s stock carries a Zacks Rank #2. The Zacks Consensus Estimate for the company’s 2019 earnings has risen 2.2% in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: SPGI
Recruit Holdings Co.’s (RCRRF - Free Report) stock alsocarries a Zacks Rank #2. The Zacks Consensus Estimate for the company’s fiscal 2020 earnings has improved 6.7% in the past 60 days.
Price and Consensus: RCRRF
Nielsen’s stock carries a Zacks Rank #2. The Zacks Consensus Estimate for the company’s 2019 earnings has improved 2.9% in the past 60 days.
Price and Consensus: NLSN
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>