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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in S&P Global (SPGI) ten years ago? It may not have been easy to hold on to SPGI for all that time, but if you did, how much would your investment be worth today?
S&P Global's Business In-Depth
With that in mind, let's take a look at S&P Global's main business drivers.
Incorporated in December 1925, S&P Global Inc. is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.
The company operates through four reportable segments: S&P Global Ratings ("Ratings"), S&P Global Market Intelligence ("Market Intelligence"), S&P Global Platts ("Platts") and S&P Dow Jones Indices ("Indices").
Ratings (46% of total revenues in 2020): Ratings operates as an independent provider of credit ratings, research, and analytics, offering investors and other market participants information, ratings and benchmarks. With offices in more than 25 countries globally, Ratings holds an important position in the world's financial infrastructure. Ratings revenues is differentiated between transaction and non-transaction revenues.
Market Intelligence (29%): It is specialized in helping investment professionals, government agencies, corporations and universities — track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform evaluations and assess credit risk. It mainly serves investment managers, investment banks, private equity firms, insurance companies, commercial banks, corporations, professional services firms, government agencies and regulators. Desktop, Data Management Solutions and Risk Services are the business lines included in the segment.
Platts (13%): Platts operates as an independent provider of information and benchmark prices for the commodity and energy markets. It specializes in offering essential price data, analytics and industry insight. It mainly serves producers, traders and intermediaries within the energy, petrochemicals, metals and agriculture markets. Platts' revenues is generated from subscription revenues, non-subscription revenues and sales usage-based royalties.
Indices (13%): Indices is a global index provider that maintains a wide variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors. Indices mainly derives revenue from asset-linked fees based on the S&P and Dow Jones indices and also from subscription and transaction revenues.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For S&P Global, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in May 2011 would be worth $9,480.90, or an 848.09% gain, as of May 7, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 213.51% and gold's return of 17.04% over the same time frame.
Going forward, analysts are expecting more upside for SPGI.
Shares of S&P Global have outperformed its industry's growth over the past year, partly due to better-than-expected earnings and revenue performance in the last four quarters. The company remains well poised to gain from growing demand for business information services. Buyouts have helped it innovate, increase differentiated content and develop new products. Effective management execution has helped it generate solid cash flow which is utilized for growth initiatives. Dividend payments and share repurchases boost investors' confidence and positively impact earnings per share. On the flip side, S&P Global remains vulnerable to proceedings, investigations and inquiries with respect to the ratings provided, leading to legal charges, damages or fines. Decline in bond issuance partially offsets increase in bank loan ratings revenue.
The stock is up 6.55% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 8 higher, for fiscal 2021. The consensus estimate has moved up as well.
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S&P Global Inc. (SPGI) : Free Stock Analysis Report
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