McGraw-Hill Financial posted better-than-expected fourth-quarter
and full year 2013 results. The robust quarterly performance was
driven by growth across all business segments except S&P
Ratings. Further, the quarterly earnings beat prompted management
to provide an upbeat guidance for 2014. The company now expects
earnings per share in the range of $3.75 $3.85. McGraw-Hill 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 paying off. However,
the pending verdict on the DOJ's civil lawsuit filed against the
company brings in significant challenges, and compels us to be on
the sidelines. Consequently, we reiterate our Neutral
recommendation on the stock.
McGraw-Hill Financial, Inc. (MHFI) is the provider of financial
information, and owns one of the top credit rating agencies
(Standard & Poor's). The McGraw-Hill Companies Inc.
rechristened as McGraw Hill Financial and commenced trading under a
new symbol "MHFI" on May 14, 2013.
The company now primarily focuses on capital and commodities
markets and includes iconic brands like S&P Ratings, S&P
Capital IQ, S&P Indices and Platts. The company currently
S&P Capital IQ: The segment provides risk evaluation,
investment research and data to potential investors, corporations,
governments, financial institutions, investment managers and
financial advisors globally.
S&P Dow Jones Indices: The company along with CME Group,
announced the commencement of its index business with the launch of
S&P-Dow Jones Indices. It keeps track of different valuation
and index benchmarks for investment advisors, wealth managers, and
Standard & Poor's Ratings Services: Standard & Poor's is
the world's foremost provider of credit ratings offering investors
information and independent benchmarks for their investment and
Commodities & Commercial Markets: The Segment consists of of
business-to-business companies specializing in commercial and
commodities markets, and consists of brands such as, J.D. Power and
Associates (acquired in 2005), McGraw-Hill Construction and
McGraw Hill Financial, Inc. (MHFI): Read the Full
MCGRAW HILL FIN (MHFI): Free Stock Analysis
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