Reasons Why You Should Retain SPGI Stock in Your Portfolio Now

S&P Global, Inc. SPGI stock has had a mixed run over the year. Shares of the company have risen 13.4%, underperforming the 15.2% growth of the Business - Information Services industry it belongs to but outperforming the 9.5% rise of the Zacks S&P 500 composite.

The company has an expected earnings growth rate of 8.7% for the current year. It has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 8.9%.

Factors That Bode Well for SPGI

SPGI is benefiting from strong growth across multiple segments. The Commodity Insights segment continues to be driven by the crude and refined product suite, while the Mobility segment sees revenue growth from the increased demand for the CARFAX product suite and strong performance in SPGI’s insurance-related offerings. Additionally, growth in asset-linked fees, fueled by higher assets under management, along with rising revenues from Data & Custom Subscriptions, is contributing to the success of S&P Dow Jones Indices.

SPGI leverages acquisitions to drive innovation, expand its content and introduce new products. In 2024, the company acquired ProntoNLP, boosting its textual data analytics capabilities. It also acquired Visible Alpha and World Hydrogen Leaders. Visible Alpha enhances the fundamental investment research capabilities on Market Intelligence’s Capital IQ Pro platform, while World Hydrogen Leaders complements Commodity Insights’ global conference business by offering comprehensive coverage of the hydrogen and derivative value chains.

The robust demand for pricing and reference data in loan and credit default swap asset classes, along with industry and company data, is driving growth in the Market Intelligence segment. In the Ratings segment, increasing collateralized loan obligation volumes and a surge in transaction revenues, fueled by favorable market conditions, are contributing to its success.

S&P Global’s strategy to conduct share repurchases and pay dividends is impressive. In 2022, 2023 and 2024, the company had $12 billion, $3.3 billion and $18.6 billion, as share repurchases, respectively, boosting investors’ morale. It paid out $1 billion, $1.1 billion and $1.1 billion in dividends in 2022, 2023 and 2024, respectively, attracting dividend-seeking investors.

SPGI: Risks to Watch

The supply chain could face significant disruptions due to President Trump's "Liberation Day" tariff announcement. Starting April 5, a 10% tariff will apply to all imports, with higher tariffs imposed on 60 countries deemed to have restrictive trade barriers, beginning April 9. Some tariffs may reach as high as 50%, particularly for countries like China. This escalation is likely to raise costs, strain international relations and create both risks and opportunities for businesses as the situation develops and trading partners respond.

SPGI’s Zacks Rank

SPGI currently carries a Zack Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks from the broader Zacks Business Services sector are Maximus MMS and AppLovin APP.

Maximus sports a Zacks Rank of #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

MMS has an encouraging earnings surprise history, having outpaced the Zacks Consensus estimate in three of the trailing four quarters and missing once. The average beat is 13.3%.

AppLovin currently sports a Zacks Rank of 1 too.

APP has an encouraging earnings surprise history, having outpaced the Zacks Consensus estimate in each of the trailing four quarters. The average beat is 23.5%.

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This article originally published on Zacks Investment Research (zacks.com).

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