S&P Global Inc. (SPGI) is the world’s leading provider of independent credit ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. The company’s operations include S&P Global Ratings, S&P Global Market Intelligence, S&P Global Platts, and S&P Dow Jones Indices.
The company generated revenue from subscriptions (41%), transactions (27%), non-transactions (20%), asset-linked fees (9%), and sales usage-based royalties (3%) last year. About 60% of that revenue came from the United States with the remainder coming from various international sources, including Asian markets and the European Union.
Accelerating Growth
S&P Global’s revenue rose 11% year-over-year to $7.4 billion in 2020. Subscription revenue was driven by growth in ‘Market Intelligence’ solution’s average contract values, continued demand for Platts proprietary content, and Indices segment growth. Non-subscription revenue also rose due to an increase in corporate bond ratings revenue that offset a decrease in bank loans and structured finance.
Looking ahead, the company expects FY21 adjusted earnings per share of between $12.25 and $12.45, which was higher than the $11.85 consensus estimates at the time, on a mid-single-digit increase in revenue. Free cash flow, excluding certain items, is expected to be between $3.3 billion and $3.4 billion, supporting its robust dividend.
The company raised its quarterly dividend by 14.9% to $0.77 per share, which represents a 0.9% forward yield. The dividend is payable on March 10, 2021 to shareholders on record as of February 24, 2021.
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