Moody's: Own The Tollbooth To The Capital Markets
- Moody's is a necessary stop on the road to the developed capital markets, collecting fees whenever debt issuers want to access any meaningful capital flows and achieve lower borrowing rates.
- The company is protected by robust network effects so deep that not even regulators can see a way around them.
- Growth runways are long as Moody's exercises pricing power and rides the trend of credit market disintermediation and globalization.
- The business doesn't need capital to grow, so almost all cash is deployed to repurchases and dividends.
- Buyers can obtain a ~10% projected intrinsic value growth and ~4% cash return annually for a reasonable price.