S&P Global Inc (SPGI, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $384.68, S&P Global Inc has witnessed a daily gain of 0.01%, marked against a three-month change of -0.33%. A thorough analysis, underlined by the GF Score, suggests that S&P Global Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here are the key components of S&P Global Inc's GF Score:
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high growth rank and momentum rank, and a slightly lower GF Value rank, GuruFocus assigned S&P Global Inc the GF Score of 94 out of 100, which signals the highest outperformance potential.
Understanding S&P Global Inc Business
S&P Global Inc, with a market cap of $121.87 billion, is a leading provider of data and benchmarks to capital and commodity market participants. The company's largest segment by profitability is S&P ratings, the largest credit rating agency in the world. S&P's largest segment by revenue is market intelligence, which provides desktop, data and advisory solutions, enterprise solutions, and credit/risk solutions mostly in the financial services industry. Other segments include commodity insights (Platts and other data), mobility (Carfax), and indexes. The company's sales stand at $12.28 billion with an operating margin of 31.54%.
Financial Strength Breakdown
According to the Financial Strength rating, S&P Global Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for S&P Global Inc stands impressively at 11.29, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.98, S&P Global Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows S&P Global Inc's impressive standing among its peers in generating profit. S&P Global Inc's strong Predictability Rank of 3.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, S&P Global Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 9%, which outperforms better than 54.63% of 681 companies in the Capital Markets industry. Moreover, S&P Global Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 12.5, and the rate over the past five years is 12.8. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given S&P Global Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. This analysis underscores the company's robust financial health, consistent profitability, and impressive growth trajectory, making it a compelling investment opportunity. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
