McGraw Hill Financial, Inc.
) looks promising and could prove to be a solid bet for
investors. The stock gathered momentum from its
better-than-expected fourth-quarter 2013 results and an upbeat
guidance. Since the earnings release on Feb 4, the stock has
garnered a return of 3.4%. Additionally, the company's long-term
estimated earnings per share growth rate is 15.5%, which now
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Investors are optimistic about this Zacks Rank #2 (Buy) stock as
it posted earnings per share of 81 cents, which rose 12% from the
year-ago quarter figure and beat the Zacks Consensus Estimate by
a couple of cents. Total revenue increased 2% year over year to
$1,250 million, reflecting strong performance across all
businesses except Standard & Poor's Ratings Services.
Moreover, the reported revenues surpassed the Zacks Consensus
Estimate of $1,241 million.
Following the sturdy performance, McGraw Hill now projects
adjusted earnings in the range of $3.75-$3.85 per share. The
current Zacks Consensus Estimate stands at $3.80 per share for
2014. Further, the company anticipates revenue growth in mid
single digits. In 2014, the company is likely to generate free
cash flow worth $1 billion.
McGraw Hill is an attractive pick for investors seeking both
growth and income, as the company announced a dividend hike on
Jan 29, 2014. The company, raised its quarterly dividend by 7.1%
to 30 cents (or $1.20 annually) from 28 cents per share (or $1.12
annually). The new payout will be given on Mar 12, 2014, to
stockholders of record on Feb 26.
Additionally, the company is likely to benefit from its strategic
investments aimed to generate long-term profitability. The
company's focus on high margin business through proper capital
allocation is reaping success.
Further, McGraw Hill's earnings streak makes investors optimistic
about the stock's future performance. The company has beaten the
Zacks Consensus Estimate in the past 4 quarters by an average of
Other better-ranked stocks that investors may bet upon include
The New York Times Company
Nielsen Holdings N.V.
). Tribune and New York Times carry a Zacks Rank #1(Strong
Buy) whereas Nielsen sports a Zacks Rank #2.