Is S&P Global Inc. (SPGI) A Good Stock To Buy Now?
Is SPGI a good stock to buy? We came across a bullish thesis on S&P Global Inc. on Dividend School’s Substack by School of Investing. In this article, we will summarize the bulls’ thesis on SPGI. S&P Global Inc.’s share was trading at $424.82 as of June 9th. SPGI’s trailing and forward P/E were 26.85 and 21.64 respectively according to Yahoo Finance.
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S&P Global is a leading financial infrastructure company that generated $15.3 billion in FY25 revenue, with ~70% from recurring subscriptions and long-term contracts, making cash flows highly predictable. Its five segments —Ratings, Market Intelligence, S&P Dow Jones Indices, Commodity Insights, and Mobility— form a deeply embedded global data ecosystem, anchored by duopolistic credit ratings power alongside Moody’s.
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Ratings and Market Intelligence deliver high switching costs, while Indices generate asset-linked fees tied to trillions in ETF AUM, creating durable pricing power. Moat strength is reinforced by S&P 500 licensing dominance and AI-enabled analytics via Kensho, which expands product defensibility. The company operates in Phase 4 capital return mode, returning roughly 85% of free cash flow through dividends and buybacks, supported by 50%+ operating margins.
Growth is mid-to-high single-digit, driven by pricing power and expansion into private credit ratings and AI monetization, where premium Capital IQ tiers command 20–30% higher pricing. Management under CEO Martina Cheung maintains disciplined capital allocation, strong ROIC above 20%, and a proven acquisition integration track record post IHS Markit. Risks remain primarily regulatory, especially SEC oversight of ratings, and competitive pressure from Bloomberg, LSEG, and FactSet, though disruption risk remains low.
Valuation is attractive at 23.5x free cash flow, below its historical average of 33.6x, implying potential rerating upside as markets normalize. Dividend aristocrat status spans 50+ consecutive years, with a ~0.9% yield and a ~21% free cash flow payout ratio, ensuring exceptional safety and continued growth potential. Overall SPGI remains a high-quality compounder with durable upside ahead.
Previously, we covered a bullish thesis on S&P Global Inc. (SPGI) by Quality Equities in May 2025, which highlighted its dominant financial infrastructure moat, recurring subscription revenues, and long-term compounding potential supported by pricing power and spin-off-driven simplification. SPGI’s stock price has depreciated by approximately 18.04%. School of Investing shares a similar view but emphasizes valuation re-rating from compressed multiples and strong capital return dynamics including 85% FCF payout and dividend aristocracy support.
