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Here's Why Investors Should Retain S&P Global (SPGI) Stock Now

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S&P Global Inc. (SPGI - Free Report) is currently benefiting from its acquisitions and pro-investor steps. SPGI’s revenues are anticipated to grow 42.7% and 11.5% in 2022 and 2023, respectively.

Factors That Augur Well

Acquisitions have always carved a key growth trajectory for S&P Global. The recent buyout of IHS Markit is expected to enhance S&P Global’s data and analytics offerings. Another acquisition of The Climate Service is expected to enhance SPGI's portfolio of essential environmental, social and governance (ESG) insights and solutions.

We are impressed with S&P Global’s endeavors to reward its shareholders through share repurchases and dividend payments. In 2021, S&P Global returned $743 million to its shareholders in the form of dividend payments. However, it did not repurchase any shares last year due to the pending merger with IHS Markit.

In 2020, SPGI returned $1.8 billion to its shareholders, including $1.2 billion through share repurchases and $645 million as dividend payouts. In 2019, S&P Global returned $1.8 billion to its shareholders with $1.2 billion as share repurchases and $560 million of dividend payments.

Such shareholder-friendly moves underpin S&P Global’s commitment to creating value for its shareholders and underlining its confidence in its business. These initiatives not only raise investors’ optimism on the stock but also positively impact the earnings per share.

A Key Risk

S&P Global's current ratio at the end of second-quarter 2022 was pegged at 1.26, lower than the current ratio (a measure of liquidity) of 1.38 reported at the end of first-quarter 2022 and the prior-year quarter’s 2.09.  Decreasing current ratio is not desirable as it indicates SPGI’s many problems in meeting its short-term debt obligations.

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) , Automatic Data Processing, Inc. (ADP - Free Report)   and  CRA International, Inc. (CRAI - Free Report) .

Avis Budget  sports a Zacks Rank #1 at present. CAR has an earnings growth rate of 108.4% for 2022.

Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.

ADP  carries a Zacks Rank #2 (Buy) at present. ADP has a long-term earnings growth expectation of 12%.

ADP delivered a trailing four-quarter earnings surprise of 5%, on average.

CRA International  carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.


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