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S&P Global (SPGI) Stock Rises 30.1% in a Year: Here's Why
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Shares of S&P Global Inc. (SPGI - Free Report) have gained 30.1% over the past year compared with 11.6% growth of the industry and against 1.7% decline of the Zacks S&P 500 composite.
Let’s delve deeper into the factors, which have contributed to the company’s outperformance.
Consecutive Earnings & Revenue Beat
S&P Global reported back-to-back earnings and revenue beat in the second, third and fourth quarters of 2019. While the company’s bottom line continued to gain from revenue growth and benefits of productivity initiatives, the top line performed well on the back of strength across all the segments namely S&P Global Ratings, S&P Global Market Intelligence, S&P Global Platts and S&P Dow Jones Indices.
Rising Demand for Business Information Services
S&P Global is gaining from increasing demand for business information services. Constantly increasing volume of data from private and government organizations has augmented the demand for improved enterprise-wide financial performance visibility. Higher demand for news, information, and analytics solutions will drive market’s growth. Further, the industry is benefiting from rising demand for risk mitigation. Changes in market dynamics are more or less a constant phenomenon and expose companies to credit fund as well as operational risks. Accurate market and financial information is required for risk mitigation, thereby spurring demand for business information services.
Strategic Acquisitions Bode Well
Acquisitions have been a key growth strategy for S&P Global, helping it continuously innovate, increase differentiated content and develop new products.
In January 2020, the company completed the acquisition of ESG Ratings Business (from RobecoSAM). ESG Ratings Business boosts S&P Global's position as a premier resource for essential ESG Data, ratings, benchmarks and insights. In 2019, the company acquired 451 Research, Canadian Enerdata, Live Rice Index and Orion technology center. 451 Research is likely to strengthen S&P Global Market Intelligence's emerging technology expertise and offerings. Canadian Enerdata enhances S&P Global's Platts division's energy analytical capabilities and strengthens its foothold in North American natural gas market. Live Rice Index is a great addition to S&P Global’s Platts global agriculture offering. Orion technology center provides the company’s employees with access to the latest technologies and global communications infrastructure.
In 2018, the company acquired RateWatch, Kensho and Panjiva. RateWatch is a great addition to S&P Global’s bank data offering. The Kensho acquisition is helping S&P Global to improve its core operations by applying actionable insights through the use of AI solutions and sophisticated algorithms, thereby augmenting its efficacy. The Panjiva buyout enhanced the company’s Global Market Intelligence's data and analytical offerings for diverse customers across the globe, generating higher revenues.
The company is expected to continue adding advanced technology and data sets through acquisitions, which, in turn, should boost its top- and bottom-line growth.
Zacks Rank & Stocks to Consider
Currently, S&P Global carries a Zacks Rank #3 (Hold).
Long-term expected EPS (three to five years) growth rate for CoreLogic, GreenSky and Huron Consulting is 11%, 12.9% and 13.5%, respectively.
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S&P Global (SPGI) Stock Rises 30.1% in a Year: Here's Why
Shares of S&P Global Inc. (SPGI - Free Report) have gained 30.1% over the past year compared with 11.6% growth of the industry and against 1.7% decline of the Zacks S&P 500 composite.
Let’s delve deeper into the factors, which have contributed to the company’s outperformance.
Consecutive Earnings & Revenue Beat
S&P Global reported back-to-back earnings and revenue beat in the second, third and fourth quarters of 2019. While the company’s bottom line continued to gain from revenue growth and benefits of productivity initiatives, the top line performed well on the back of strength across all the segments namely S&P Global Ratings, S&P Global Market Intelligence, S&P Global Platts and S&P Dow Jones Indices.
Rising Demand for Business Information Services
S&P Global is gaining from increasing demand for business information services. Constantly increasing volume of data from private and government organizations has augmented the demand for improved enterprise-wide financial performance visibility. Higher demand for news, information, and analytics solutions will drive market’s growth. Further, the industry is benefiting from rising demand for risk mitigation. Changes in market dynamics are more or less a constant phenomenon and expose companies to credit fund as well as operational risks. Accurate market and financial information is required for risk mitigation, thereby spurring demand for business information services.
Strategic Acquisitions Bode Well
Acquisitions have been a key growth strategy for S&P Global, helping it continuously innovate, increase differentiated content and develop new products.
In January 2020, the company completed the acquisition of ESG Ratings Business (from RobecoSAM). ESG Ratings Business boosts S&P Global's position as a premier resource for essential ESG Data, ratings, benchmarks and insights. In 2019, the company acquired 451 Research, Canadian Enerdata, Live Rice Index and Orion technology center. 451 Research is likely to strengthen S&P Global Market Intelligence's emerging technology expertise and offerings. Canadian Enerdata enhances S&P Global's Platts division's energy analytical capabilities and strengthens its foothold in North American natural gas market. Live Rice Index is a great addition to S&P Global’s Platts global agriculture offering. Orion technology center provides the company’s employees with access to the latest technologies and global communications infrastructure.
In 2018, the company acquired RateWatch, Kensho and Panjiva. RateWatch is a great addition to S&P Global’s bank data offering. The Kensho acquisition is helping S&P Global to improve its core operations by applying actionable insights through the use of AI solutions and sophisticated algorithms, thereby augmenting its efficacy. The Panjiva buyout enhanced the company’s Global Market Intelligence's data and analytical offerings for diverse customers across the globe, generating higher revenues.
The company is expected to continue adding advanced technology and data sets through acquisitions, which, in turn, should boost its top- and bottom-line growth.
Zacks Rank & Stocks to Consider
Currently, S&P Global carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are CoreLogic , GreenSky and Huron Consulting (HURN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term expected EPS (three to five years) growth rate for CoreLogic, GreenSky and Huron Consulting is 11%, 12.9% and 13.5%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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