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S&P Global: A Fantastic Company Priced Out Of Reach

Jun. 10, 2020 3:05 PM ETS&P Global Inc. (SPGI)7 Comments
Ash Anderson profile picture
Ash Anderson


  • We're all familiar with S&P's Indices division, but that's actually the smallest of the bunch. S&P is a diversified financial research agency operating around the globe.
  • After returning 48% over the last year, I dig in to see if there's any value left for us to cling onto, or if we must wait for a pullback.
  • The median valuation comes in at $319, below where S&P Global is trading today.
  • I do much more than just articles at High-Quality Hideaway: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

Image: S&P Global Logo

I have long believed that high-quality can be bought at almost any point in time. If one holds onto that high-quality firm, they will see a return that beats the market because others will continue to invest and seek that high-quality for themselves. Thus, today, I want to take a look at a high-quality firm that you're almost certainly aware of, S&P Global (NYSE:SPGI).

ChartData by YCharts

Over the last year, this $80B company has returned 48% to investors by way of price gains. Add to that the small dividend and some reasonable buybacks, and it has been a good year, despite the dips.

Today, S&P Global trades at all-time highs. Is it reasonable to expect we can get in at these levels and make a market-beating return? Let's explore.

An Overview of S&P Global

As an investor, you're likely familiar with the S&P brand, but the firm does an awful lot more than place its name on an index. Founded in 1925, S&P Global offers ratings, analytics, and data services that cover equities, commodities, and bonds worldwide.

Image: SPGI Revenue Breakdown

All told, there are four distinct operating segments within S&P Global. The largest is "Ratings." This segment was responsible for almost 50% of all revenues in 2019. As the name indicates, this segment of S&P is responsible for providing credit ratings, benchmarks, and research to investors worldwide.

Market Intelligence made up roughly 30% of 2019's revenues. This segment helps investment firms, endowments, and other large investment arms make decisions. Services and software provided through this segment also help investment decision-makers manage risk and keep abreast of the markets.

Platts, a unique name for a segment, is S&P's provider of energy and commodity information. The segment covers metals, agriculture, shipping, and energy-related markets such as natural gas, oil, and coal. It is responsible for

ChartData by YCharts

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This article was written by

Ash Anderson profile picture
I am a Software Engineer by trade and an avid market participant. Traditionally a long-only investor, I use home-grown software to find the best companies at the best prices. My investment philosophy is primarily high-quality firms. Firms that hold a significant advantage in their market, or demonstrate the ability to get to the peak. Software is my area of expertise, so my writing will frequently cover those in that sector. I also cover stocks that I consider to be high-quality, and investable that are outside the software world.Fans of video, please check out my YouTube channel where I also cover finance and stock research at youtube.com/ashanderson1

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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