The present turbulence in the markets affords, as it invariably does, the opportunity to acquire solid, if somewhat unexciting, assets at a reasonable discount. The basic principle, of course, remains unchanged: to purchase when others are disposed to sell, and to anticipate a future, distant enough to avoid immediate embarrassment. One searches, naturally, for something possessing a degree of permanence in a world devoted to ephemera.
S&P Global, a concern that has, for decades, exhibited a remarkable consistency – a quality rarely encountered in these volatile times – has recently suffered a modest downturn. A decline of approximately eighteen percent year to date, while hardly catastrophic, is sufficient to pique the interest of the discerning investor. It is, one might say, a touch of realism in an age of unbridled optimism.
Considering its entrenched position, diversified revenue streams (a term one dislikes, yet acknowledges), and a track record that borders on the monotonous, S&P Global presents itself as a rather tempting proposition. It is, in short, a long-term survivor, and one should not dismiss it lightly.
A Moat, of Sorts
Few financial institutions have demonstrated such unwavering stability over the years. Since 2008, it has experienced but one calendar year of decline – 2022, when the prevailing pessimism inflicted a twenty-nine percent reduction in its value. Every other year, it has managed to eke out a positive return. Over the past decade, it has achieved an average annualized return of sixteen percent, a figure that rather shames the S&P 500’s twelve-point-seven percent.
This steady performance stems from its dominance in two key areas, both protected by what one might generously term ‘moats’. Most are familiar with S&P Global as the proprietor of the S&P indexes, and a controlling interest in the Dow Jones. It is, effectively, one of three entities that dictate terms in this peculiar realm. As the standard by which performance is measured, and the foundation for countless exchange-traded funds, it remains remarkably impervious to disruption. The newcomers, naturally, are always eager to challenge the established order, but their efforts are rarely rewarded.
The same applies to its credit rating business, though the ‘moat’ is even wider. S&P Global, along with Moody’s, effectively controls eighty percent of the market. Fitch trails distantly behind. Its position is reinforced by regulatory approval, a reputation for impartiality (a claim one views with a degree of skepticism), and the considerable expense involved in switching to an alternative provider. The inertia of established systems is, of course, a powerful force.
S&P Global also possesses business lines that offer market intelligence and commodities insights to institutional clients. These ventures tend to flourish during periods of market decline, providing a welcome counterbalance to the prevailing gloom. A degree of resilience is, undeniably, a valuable asset.
A Temporary Setback
This recent dip, it should be noted, is unusual for S&P Global. It is attributable to somewhat weaker-than-anticipated guidance. While the company anticipates revenue growth of six to eight percent, and earnings growth of eight to ten percent, these figures represent a deceleration from the previous year. This is due, in part, to the prospect of lower equity market returns affecting index revenues, a sluggish economy impacting credit ratings, and the impending divestiture of its mobility analytics division.
These are, however, short-term concerns. S&P Global is built for the long haul. The opportunity to acquire it at a twenty percent discount, and at a price of twenty-one times forward earnings, is simply too advantageous to ignore. One rarely encounters such prudence rewarded.
Furthermore, it is a Dividend King, having increased its dividend for fifty-three consecutive years. It is difficult to identify a more reliable, long-term financial stock to acquire and retain. A degree of predictability, in these turbulent times, is a rare and valuable commodity.
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2026-03-17 20:52