S&P Global Inc. (SPGI): A Bull Case Theory

We came across a bullish thesis on S&P Global Inc. (SPGI) on Substack by Quality Equities. In this article, we will summarize the bulls’ thesis on SPGI. S&P Global Inc. (SPGI)'s share was trading at $518.36 as of May 12^th. SPGI’s trailing and forward P/E were 40.72 and 30.67 respectively according to Yahoo Finance.

S&P Global (SPGI) represents one of the most compelling long-term investment opportunities in today’s market, thanks to its dominant role in the global financial system, diversified high-margin business lines, and scalable, capital-light operating model. Best known for its credit ratings, indices, and financial data services, the company is deeply entrenched in capital markets infrastructure, offering products that are mission-critical and difficult to replicate. Its ratings segment is essential for global debt issuance, while the S&P Dow Jones Indices division underpins trillions of dollars in passive investments. These businesses generate recurring revenue with substantial pricing power, making SPGI a resilient compounder over time.

Beyond its ratings franchise, S&P Global has significantly diversified, expanding into market intelligence, commodity analytics through Platts, and ESG-driven financial data, all of which benefit from long-term secular tailwinds like increased regulation, the rise of data-driven investing, and sustainability-focused capital allocation. These newer business lines are predominantly subscription-based, have strong margins, and are capital-efficient, reinforcing SPGI’s already impressive free cash flow profile. The firm has consistently used this cash flow to return capital via dividends and buybacks while also making strategic acquisitions to broaden its moat.

Recently, S&P Global announced the spin-off of its mobility business, a segment inherited from the IHS Markit acquisition. This move reflects a sharper strategic focus on its high-margin, data-centric franchises, while unlocking value from a slower-growth, cyclical automotive analytics unit that doesn't align as tightly with the company’s core vision. The separation is expected to streamline operations, optimize capital allocation, and allow both entities to pursue more focused growth strategies.

While regulatory scrutiny on the ratings business and competitive pressures in financial data remain risks, S&P Global’s entrenched market position, scale advantages, and historical execution mitigate these concerns. The company is well-positioned to grow earnings at a mid-to-high teens CAGR over the next five years, powered by organic growth, margin expansion, and disciplined capital deployment. At a free cash flow yield of 3.56%, investors are paying a reasonable price for a high-quality, predictable business with long-term tailwinds and exceptional pricing power SPGI offers both stability and scalable upside, making it a core compounder in any long-term portfolio.

S&P Global Inc. (SPGI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 99 hedge fund portfolios held SPGI at the end of the fourth quarter which was 85 in the previous quarter. While we acknowledge the risk and potential of SPGI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SPGI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.