Benchmark Raises Price Target on McGraw-Hill on Positive Outlook; Maintains “Buy” (MHP)
Benchmark Company analysts raised the price target on McGraw-Hill Companies Inc (MHP) on Monday, as they are positive in the information services company’s 2013 outlook – especially its Standard & Poor’s credit rating business.
The analysts reiterated a “Buy” rating on MHP and see shares reaching $59, up from the previous target of $57. This new valuation suggests a 14% upside to Monday’s closing price of $51.93.
A Benchmark analyst commented, “McGraw Hill recently completed the sale of McGraw Hill Education to investment funds associated with Apollo Group for $2.5 billion. Through Standard & Poor’s, McGraw-Hill is one of the two the largest credit rating agencies in the world. Ratings agency revenue is highly correlated to bond issuance. 2012 appears headed for a strong year for bond issuance. With a continuing low interest rate environment, corporations should continue to issue new debt for capital expenditures, share repurchases, mergers and acquisitions, and refinancing. There remains a substantial amount of debt to be refinanced that ought to drive debt issuance through 2015. S&P estimates more than $1 trillion will be financed each year for the next several years.”
McGraw-Hill shares were inactive during pre-market trading on Tuesday. The stock is down -5.01% year-to-date.
The Bottom Line
Shares of McGraw-Hill (MHP) have a dividend yield of 2.16% based on last night’s closing price of $51.93 and the company’s annualized dividend payout of $1.12 per share.
McGraw-Hill Companies Inc (MHP) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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