S&P Global Inc (NYSE:SPGI) has been around in one form or another for about 150 years. In 1860, Henry Varnum Poor published an investors’ guide to the railroad industry. In 1888, James McGraw bought the industry publication, the American Journal of Railway Appliances. In 1897, John Hill bought the trade publication American Machinist. And in 1923, Standard Statistics Co initiated ratings of mortgage bonds.
From these four beginnings, we get Standard & Poor’s and McGraw Hill business intelligence publications, markets research, analytics, ratings and consulting businesses.
Nowadays, most investors are familiar with S&P indexes as benchmarks for the U.S. stock market, but the business goes much deeper than that. And after the transition from paper products to digital ones, the business has transitioned in the past couple decades into another iteration of global business intelligence powerhouse.
Granted, McGraw Hill first bought Standard & Poor’s in 1966. But traditional publishing was still in its heyday. Once the dotcom boom hit, traditional publishers had to be very nimble in navigating the new digital future.
And SPGI has navigated those treacherous waters well.
It was just 2012, for example, when McGraw Hill’s financial division was part of joint venture that took over the S&P and Dow Jones indexes. In 2013, McGraw Hill spun off its educational division of products and rebranded as McGraw Hill Financial.
And just two years ago that McGraw Hill Financial rebranded as S&P Global.
Now all the resources and institutional memory that goes back to 1860 are under one company with a global reach and huge growth opportunities.
Bottom Line on S&P Global Stock
As the world has become smaller due to the speed of the Digital Age, information is one of the most prized assets there is.
And companies like S&P Global are now more highly valued for their ability to access and analyze data and business intelligence than they are for their indexes and ratings services.
The most interesting aspect of this publishing empire is, that while many major publishers are struggling, SPGI is doing very well. It has an impressive $48 billion market cap. S&P Global stock is up 47% in the past 12 months and it’s up 12% year to date, even after Thurday’s selloff.
In the age of index investing, it pays to build and own the indexes that everyone uses.
Even as index investing loses some of its luster as the Federal Reserve cuts away its decade-old safety net, S&P Global stock will still be relevant in this space. The rise of sector specific exchange traded funds (ETFs) hasn’t diminished. And at this point it’s more likely to expand from here as investors start to seek out specific sectors that generating growth and safety, rather than relying on the broad market.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.