We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
S&P Global's (SPGI) Robust Acquisition Strategy Aids Growth
Read MoreHide Full Article
S&P Global Inc. (SPGI - Free Report) , has been reporting better-than-expected earnings performance in three of the four trailing quarters owing to the continued demand for the company’s innovative acquisitions and business information services. Shareholder-friendly policies also bode well. On the other hand, SPGI is likely to be troubled by low liquidity.
Shares of SPGI have outperformed its industry in the past year. The company’s share increased 3.2% against the 0.2% decrease of its industry.
S&P Global reported impressive first-quarter 2023 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. Adjusted earnings per share (excluding 68 cents from non-recurring items) of $3.15 beat the Zacks Consensus Estimate by 7.9% and rose 9% year over year. Revenues of $3.16 billion surpassed the consensus estimate by 3.6% and improved 32.3% year over year, backed by the inclusion of IHS Markit businesses.
Current Situation of SPGI
The increase in demand for business information services has been one of the success factors for S&P Global. In recent times, the rapid increase in demand from private and government organizations has kept the demand scenario upbeat.
S&P Global’s acquisition strategy is one of its key growth drivers. Acquisitions help differentiate the company’s offerings and develop new products. In Jan 2023, S&P Global announced the acquisition of ChartIQ which enhances its market intelligence segment. In Dec 2022, Shades of Green business from the Center for International Climate Research was acquired to enhance its second-party opinions offering. In Feb 2022, the buyout of IHS Markit led to the addition of Mobility and Engineering Solutions to the company’s portfolio.
The company follows a shareholder-friendly policy. In 2022, 2021 and 2020, SPGI paid $1 billion, $743 million and $645 million, respectively, to shareholders in the form of dividends. The company returned $12 billion and $1.2 billion as share repurchases in the year 2022 and 2020 respectively.
Some Concerning Points
S&P is bothered by increasing expenses owing to investments in productivity enhancements, higher compensation costs and growth initiatives. During 2022, total expenses of $8.2 billion increased more than 100% year over year.
S&P Global's current ratio at the end of first-quarter 2023 was pegged at 0.91, lower than the current ratio of 1.38 reported at the end of first-quarter 2023. It indicates the company might face problems meeting its short-term debt obligations.
Zacks Rank and Stocks to Consider
SPGI currently carries a Zacks Rank #3 (Hold).
Investors interested in the Zacks Business Services sector can consider the following stocks:
Green Dot (GDOT - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate of Green Dot’s revenues suggests a decline of 4.2% year over year to $340.1 million and the same for earnings indicates a 52.7% dip to 35 cents per share. The company has an impressive earning surprise history, beating the consensus mark in all four trailing quarters, the average surprise being 37.3%.
DocuSign (DOCU - Free Report) : For the first quarter of fiscal 2023, the Zacks Consensus Estimate of DocuSign’s revenues suggests an increase of 8.9% year over year to $641.2 million and the same for earnings suggests an increase of 39.5% to 53 cents per share. The company has an impressive earning surprise history, beating the consensus mark in three instances and missing on one instance, the average surprise being 12.3%.
DOCU has a growth score of A along with a Zacks Rank of 3, at present.
Maximus (MMS - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate of Maximus’ revenues suggests an increase of 6.1% year over year to $1.2 billion and the same for earnings indicates a 46.2% rise to $1.14 per share. The company has an impressive earning surprise history, beating the consensus mark in three instances and missing on one instance, the average surprise being 9.6%.
MMS has a VGM score of A along with a Zacks Rank #2 (Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
S&P Global's (SPGI) Robust Acquisition Strategy Aids Growth
S&P Global Inc. (SPGI - Free Report) , has been reporting better-than-expected earnings performance in three of the four trailing quarters owing to the continued demand for the company’s innovative acquisitions and business information services. Shareholder-friendly policies also bode well. On the other hand, SPGI is likely to be troubled by low liquidity.
Shares of SPGI have outperformed its industry in the past year. The company’s share increased 3.2% against the 0.2% decrease of its industry.
S&P Global Inc. Price
S&P Global Inc. price | S&P Global Inc. Quote
S&P Global reported impressive first-quarter 2023 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. Adjusted earnings per share (excluding 68 cents from non-recurring items) of $3.15 beat the Zacks Consensus Estimate by 7.9% and rose 9% year over year. Revenues of $3.16 billion surpassed the consensus estimate by 3.6% and improved 32.3% year over year, backed by the inclusion of IHS Markit businesses.
Current Situation of SPGI
The increase in demand for business information services has been one of the success factors for S&P Global. In recent times, the rapid increase in demand from private and government organizations has kept the demand scenario upbeat.
S&P Global’s acquisition strategy is one of its key growth drivers. Acquisitions help differentiate the company’s offerings and develop new products. In Jan 2023, S&P Global announced the acquisition of ChartIQ which enhances its market intelligence segment. In Dec 2022, Shades of Green business from the Center for International Climate Research was acquired to enhance its second-party opinions offering. In Feb 2022, the buyout of IHS Markit led to the addition of Mobility and Engineering Solutions to the company’s portfolio.
The company follows a shareholder-friendly policy. In 2022, 2021 and 2020, SPGI paid $1 billion, $743 million and $645 million, respectively, to shareholders in the form of dividends. The company returned $12 billion and $1.2 billion as share repurchases in the year 2022 and 2020 respectively.
Some Concerning Points
S&P is bothered by increasing expenses owing to investments in productivity enhancements, higher compensation costs and growth initiatives. During 2022, total expenses of $8.2 billion increased more than 100% year over year.
S&P Global's current ratio at the end of first-quarter 2023 was pegged at 0.91, lower than the current ratio of 1.38 reported at the end of first-quarter 2023. It indicates the company might face problems meeting its short-term debt obligations.
Zacks Rank and Stocks to Consider
SPGI currently carries a Zacks Rank #3 (Hold).
Investors interested in the Zacks Business Services sector can consider the following stocks:
Green Dot (GDOT - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate of Green Dot’s revenues suggests a decline of 4.2% year over year to $340.1 million and the same for earnings indicates a 52.7% dip to 35 cents per share. The company has an impressive earning surprise history, beating the consensus mark in all four trailing quarters, the average surprise being 37.3%.
GDOT has a VGM score of A and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DocuSign (DOCU - Free Report) : For the first quarter of fiscal 2023, the Zacks Consensus Estimate of DocuSign’s revenues suggests an increase of 8.9% year over year to $641.2 million and the same for earnings suggests an increase of 39.5% to 53 cents per share. The company has an impressive earning surprise history, beating the consensus mark in three instances and missing on one instance, the average surprise being 12.3%.
DOCU has a growth score of A along with a Zacks Rank of 3, at present.
Maximus (MMS - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate of Maximus’ revenues suggests an increase of 6.1% year over year to $1.2 billion and the same for earnings indicates a 46.2% rise to $1.14 per share. The company has an impressive earning surprise history, beating the consensus mark in three instances and missing on one instance, the average surprise being 9.6%.
MMS has a VGM score of A along with a Zacks Rank #2 (Buy).