Insights

• S&P Global exhibits strong revenue growth and profitability, with margins significantly above the industry average.
• The company maintains a conservative capital structure with low financial leverage and strong debt service capacity.
• Potential short-term liquidity issues are mitigated by strong cash flow generation.
• The planned spin-off of the Mobility division could impact future financial performance.
• The company faces risks from cybersecurity threats, regulatory changes, and the transition to a low-carbon economy.

Analysis

• Revenue - S&P Global has demonstrated consistent revenue growth, driven by strong market demand and effective sales strategies. - The sales/revenue experienced positive growth in 6 of the last 8 quarters, with a 3-year CAGR of 18.68% and a 5-year CAGR of 15.95%. - The enterprise value to sales ratio of 11.82 is above the industry average, suggesting a premium valuation.
  • Profitability
    • The company exhibits strong profitability, with a net profit margin of 28.86% and an EBITDA margin of 52.05%, both significantly above the industry average.
    • The gross profit margin of 61.72% is also higher than the industry average, indicating efficient operations.
    • EBIT and net income have shown strong upward trends, reflecting improved operational efficiency and profitability.
  • Liquidity
    • The current ratio of 0.9 and quick ratio of 0.9 are below the industry average and less than 1, suggesting potential short-term liquidity issues.
    • However, the company's strong cash flow generation mitigates this concern.
  • Solvency
    • S&P Global maintains a conservative capital structure, with a total debt to total equity ratio of 36.03% and a debt/EBITDA ratio of 1.6, both significantly below the industry average.
    • This indicates low financial leverage and strong debt service capacity.
  • Operational Efficiency
    • The company has demonstrated effective expense management, controlling operating expenses while increasing revenue.
    • Return on average assets (6.57%) and return on average invested capital (8.63%) are above the industry average, indicating efficient use of assets.
  • Cash Flow Analysis - Net operating cash flow decreased in the most recent quarter due to changes in working capital, but free cash flow has been consistently positive, demonstrating the company's ability to generate cash. - The company's capital allocation strategy has balanced organic growth, M&A, and shareholder returns.
  • Risk Factors
    • The company faces risks from cybersecurity threats, data privacy/protection regulations, and the transition to renewable energy and a net zero economy.
    • Regulatory changes, such as the EU's Benchmark Regulation and MiFID II, can increase compliance costs and impact the company's operations.
  • Future Outlook
    • Expect continued revenue growth, driven by market demand and strategic initiatives.
    • Profitability margins are likely to remain strong, supported by effective expense management.
    • The planned spin-off of the Mobility division could impact future financial performance.

Benchmarks (as of 2025-06-18)

• Performance Comparison:

  • S&P Global, Inc. (SPGI) has shown mixed performance compared to the Consumer Discretionary Select Sector SPDR Fund (XLY). Year-to-date, SPGI has outperformed XLY by 6.5%, with returns of 1.81% versus -4.69%. However, over the past year, SPGI has underperformed XLY, with returns of 15.4% versus 17.24%. Over longer periods, such as 2 and 3 years, SPGI has outperformed XLY, indicating stronger long-term growth.
  • The consistency of SPGI's performance relative to XLY varies. In the short term (1 week), SPGI has outperformed, while in the medium term (1 month and 3 months), it has underperformed. The 6-month performance shows significant outperformance by SPGI.

• Risk and Return Analysis:

  • The annualized returns show that SPGI has underperformed XLY over the past year (15.4% vs. 17.24%) but has outperformed over 2 and 3 years. The 2-year annualized returns are 14.16% for SPGI and 12.98% for XLY, and the 3-year annualized returns are 17.24% for SPGI and 15.58% for XLY.
  • SPGI's annualized volatility has generally been lower than XLY's, indicating that SPGI is less volatile. For example, in Q4 2022, SPGI's volatility ranged from 23.9% to 43.61%, while XLY's ranged from 21.83% to 38.27%.
  • The maximum drawdown for SPGI was -39.76% on 2022-10-14, while for XLY it was -39.67% on 2022-12-28. These similar drawdown figures suggest comparable risk profiles in terms of potential peak-to-trough declines.

• Risk-Adjusted Performance:

  • The Sharpe Ratio, which measures risk-adjusted return, has generally been higher for XLY compared to SPGI. This indicates that XLY has offered better risk-adjusted returns over the observed period. For instance, in Q4 2024, SPGI's Sharpe Ratio ranged from 0.85 to 1.64, while XLY's ranged from 1.38 to 1.81.
  • SPGI's beta has generally been around or below 1, while XLY's beta has consistently been above 1. This suggests that SPGI is less sensitive to market movements compared to XLY. As of Q2 2025, SPGI's beta is 0.77, while XLY's beta is 1.15.

• Overall Assessment:

  • SPGI has demonstrated strong long-term performance with lower volatility compared to XLY. However, XLY has generally provided better risk-adjusted returns, as indicated by its higher Sharpe Ratio. SPGI's lower beta suggests it is less sensitive to market movements, which may appeal to more risk-averse investors.
  • A significant trend is the decreasing volatility for both SPGI and XLY from 2022 to 2024, with a slight increase in early 2025. The consistent outperformance of XLY in terms of risk-adjusted returns, despite SPGI's lower volatility, is also notable.

Peers Price History(as of 2025-06-18)

• Performance Comparison:
  • S&P Global (SPGI) has shown mixed performance compared to its peer companies. Over the past year, SPGI's return of 15.4% significantly underperformed Nasdaq (NDAQ), which had a return of 47.69%. However, SPGI slightly outperformed MSCI Inc. (MSCI), which had a return of 13.95%. Over longer periods, such as the past two and three years, SPGI has also underperformed NDAQ but outperformed MSCI. For example, over three years, SPGI's return was 61.15% compared to NDAQ's 77.23% and MSCI's 40.49%.
• Risk and Return Analysis:
  • The annualized returns show that SPGI generally provides lower returns compared to NDAQ but higher returns than MSCI. For instance, the three-year annualized return for SPGI is 17.24%, while NDAQ is 21.02% and MSCI is 12.0%.
  • In terms of annualized volatility, SPGI's volatility has generally been moderate compared to its peers. MSCI has often exhibited higher volatility, while NDAQ's volatility has been comparable to SPGI's. For example, in Q4 2022, SPGI's volatility ranged from 24.66 to 43.61, NDAQ's ranged from 24.31 to 36.06, and MSCI's ranged from 32.05 to 53.06.
  • The maximum drawdown for SPGI was -39.76% on 10/14/2022, which is less than MSCI's -42.02% on the same date but more than NDAQ's -31.47% on 10/03/2023. This suggests that SPGI's risk profile is moderate compared to its peers.
• Risk-Adjusted Performance:
  • The Sharpe Ratio analysis indicates that NDAQ generally offers better risk-adjusted returns compared to SPGI and MSCI. SPGI's Sharpe Ratios have been lower than NDAQ's but higher than MSCI's in many periods. For example, in Q4 2024, SPGI's Sharpe Ratio ranged from 0.85 to 1.64, while NDAQ's ranged from 1.71 to 2.59, and MSCI's ranged from 0.39 to 0.99.
  • SPGI's beta has generally fluctuated around 1, indicating that its sensitivity to market movements is close to the market average. NDAQ's beta has been consistently below 1, suggesting lower market sensitivity, while MSCI's beta was consistently above 1 until recently, indicating higher market sensitivity.
• Overall Assessment:
  • SPGI has shown moderate performance, risk, and risk-adjusted returns compared to Nasdaq, Inc. (NDAQ) and MSCI, Inc. (MSCI). While SPGI has underperformed NDAQ in terms of historical performance and annualized returns, it has generally outperformed MSCI. SPGI's volatility and drawdown figures are also moderate compared to its peers. The Sharpe Ratio analysis suggests that NDAQ offers better risk-adjusted returns, while SPGI's beta indicates market sensitivity close to the average.
  • A significant trend is the recent decrease in beta for all three companies, indicating reduced market sensitivity. Additionally, the Sharpe Ratios have generally increased over time, suggesting improving risk-adjusted returns. Investors should consider SPGI as a moderate-risk investment with moderate returns compared to its peers, with NDAQ offering higher returns but potentially higher risk, and MSCI offering lower returns with potentially higher risk until recently.

Peers Fundamentals(as of 2025-03-31)

1. Market Position and Size:

   • S&P Global (SPGI) has a significantly larger market capitalization of $155380.35 million compared to Nasdaq (NDAQ) at $44884.86 million and MSCI at $43004.63 million.
   • SPGI's substantial market cap is supported by its higher revenue ($14493 million), gross income ($8892 million), EBITDA ($7123 million), and net income ($3952 million) compared to its peers.
   • SPGI holds a dominant market position within its peer group due to its significantly larger size and financial metrics, suggesting a stronger influence and broader scope of operations in the financial publishing and services industry.

2. Profitability and Efficiency:

   • SPGI's Gross Profit Margin of 61.35% is greater than the industry average of 54.32% and Nasdaq's 53.18%, but less than MSCI's 75.71%.
   • SPGI's EBITDA Margin of 49.15% is greater than the industry average of 39.14% and Nasdaq's 34.49%, but less than MSCI's 61.05%.
   • SPGI's Net Profit Margin of 27.27% is greater than the industry average of 17.3% and Nasdaq's 16.36%, but less than MSCI's 39.08%.
   • SPGI demonstrates strong profitability, outperforming the industry average and Nasdaq in key profitability metrics. However, MSCI exhibits superior margins, indicating higher efficiency in converting revenue to profit.

3. Financial Health and Stability:

   • SPGI's Current Ratio is 0.9, which is greater than MSCI's 0.84, but less than the industry average of 1.21.
   • SPGI's Quick Ratio is 0.9, which is greater than MSCI's 0.84, but less than the industry average of 1.21.
   • SPGI's Total Debt to Total Equity Ratio is 36.03%, which is less than Nasdaq's 84.65% and the industry average of 122.48%.
   • SPGI's Debt / EBITDA is 1.6, which is less than Nasdaq's 3.46%, MSCI's 2.55, and the industry average of 2.93.
   • SPGI exhibits a relatively conservative debt position compared to its peers and the industry average. However, its liquidity ratios are slightly below the industry average, suggesting a need for more efficient working capital management.

4. Valuation and Market Perception:

   • SPGI's Enterprise Value To Sales is 11.82, which is greater than Nasdaq's 6.79 and the industry average of 9.27, but less than MSCI's 16.54.
   • SPGI's Enterprise Value To EBITDA is 23.95, which is greater than Nasdaq's 19.53 and the industry average of 23.24, but less than MSCI's 27.01.
   • SPGI's Price To Earnings is 39.78, which is greater than Nasdaq's 35.45 and MSCI's 38.22, but less than the industry average of 52.05.
   • SPGI's Price to Book Ratio is 4.76, which is greater than Nasdaq's 3.89, but less than the industry average of 9.17.
   • SPGI's Price To Sales Ratio is 10.76, which is greater than Nasdaq's 5.8 and the industry average of 8.25, but less than MSCI's 14.8.
   • SPGI's valuation metrics suggest that it is relatively fairly valued compared to its peers, with some metrics above and some below the industry average.

5. Cash Flow and Capital Management:

   • SPGI's Net Operating Cash Flow is $5694 million, which is greater than Nasdaq's $2072 million and MSCI's $1503.23 million.
   • SPGI's Total Capital Expenditure is $143 million, which is less than Nasdaq's $217 million, but greater than MSCI's $123.74 million.
   • SPGI's Free Cash Flow is $5551 million, which is greater than Nasdaq's $1855 million and MSCI's $1379.48 million.
   • SPGI demonstrates strong cash flow generation capabilities, significantly outperforming its peers in net operating cash flow and free cash flow, indicating efficient operations and effective capital management.

6. Growth and Future Prospects:

   • SPGI shows consistently higher growth in EBITDA, Net Income, Basic Earnings per Share, Free Cash Flow, Free Cash Flow Margin, and EBIT Margin compared to the peer group average in the most recent year.
   • SPGI's 3-year CAGR is greater than its 5-year CAGR for Sales/Revenue, EBITDA, and Free Cash Flow, indicating accelerating growth in these areas. However, the opposite is true for Net Income, Basic Earnings per Share, and EBIT Margin, suggesting decelerating growth in these metrics.
   • SPGI's competitive position appears strong in terms of revenue and EBITDA growth, but weaker in terms of net income and earnings per share growth. The accelerating growth in revenue and EBITDA suggests that SPGI is effectively expanding its market presence and improving its operational efficiency. However, the decelerating growth in net income and earnings per share raises concerns about profitability and cost management.

7. Potential for Investment:

   • SPGI presents an attractive investment opportunity due to its size, strong cash flow, and conservative debt position. Its growth potential is evident in its accelerating revenue and EBITDA growth.
   • However, investors should be aware of its lower profitability and capital management efficiency compared to MSCI, as well as its slightly below-average liquidity ratios.

8. Key Risks and Considerations:

   • SPGI's liquidity ratios are slightly below the industry average, suggesting a need for more efficient working capital management.
   • SPGI's decelerating growth in net income and earnings per share raises concerns about profitability and cost management.
   • SPGI's revenue growth without corresponding profit growth could be a potential red flag, suggesting that SPGI may be facing challenges in converting revenue into profit.

9. Overall Assessment:

   • SPGI demonstrates strong overall financial health and performance relative to its peer group and industry averages. It has a dominant market position due to its significantly larger size and financial metrics. SPGI exhibits strong cash flow generation capabilities and a conservative debt position. However, it underperforms MSCI in profitability and capital management metrics, and its liquidity ratios are slightly below the industry average.