Dividend Aristocrat Overview: S&P Global, Inc.

About S&P Global, Inc.

McGraw Hill Dividend Growth

J. D. Power & Associates was bought by McGraw Hill, the predecessor to S&P Global in 2005.
Photo courtesy LG Electronics/flickr.com.

S&P Global, Inc., formerly known as McGraw Hill Financial, provides financial information and intelligence to the global capital, commodity and corporate markets, including credit ratings for bond markets around the world. McGraw Hill owns the Standard & Poor’s, Dow Jones, J. D. Power and Platts brands, and employs 17,000 people in 29 countries around the world.

S&P Global divides its operations into 4 segments: (1) Standard & Poor’s Rating Services, (2) S&P Capital IQ, (3) S&P Dow Jones Indices, and (4) Commodities and Commercial.

Standard & Poor’s Rating Services helps investors and market participants deal with financial risks through research, analysis and credit ratings for the international bond markets. This segment provides about 50% of S&P Global’s revenues.

S&P Capital IQ provides intelligence and information to investors through a variety of subscription platforms including RatingsXpress®. This segment contributes about 25% of S&P Global’s total sales.

S&P Dow Jones Indices include the S&P 500 and Dow Jones Industrial Average brands, including the exchange traded portfolio (ETF) products.  This segment generates 10% of S&P Global’s sales.

Finally, the Commodities & Commercial segment includes the J. D. Power and Platts brands, along with McGraw Hill Construction. J. D. Power provides customer satisfaction research to companies, Platts provides financial intelligence for the commodities (i.e., energy, metals and agriculture) markets, and McGraw Hill Construction provides information to the construction industry.  Commodities & Commercial provides about 15% of total company sales.

Both James H. McGraw and John A. Hill got started in the publishing industry by covering the major American industry of the 2nd half of the 19th century: railroads. McGraw had purchased a rail industry magazine The American Journal of Railway Appliances in 1888, and in 1897 Hill acquired the remaining interest in the American Machinist. In 1902, The American Machinist Press was incorporated as the Hill Publishing Company, and in 1909 the two men merged their book publishing departments to form the McGraw-Hill Book Company. Eight years later, the two companies merged their remaining operations and formed the McGraw-Hill Publishing Company.

McGraw-Hill began trading on the New York Stock Exchange in 1929 and began publishing The Business Week about 7 weeks before the crash of the stock market in October. With McGraw’s publishing company having entered the reference book market in 1907 with the first publication of the Standard Handbook for Electrical Engineers, the merged company expanded into other publication markets, including the trade book field with The World’s Economic Dilemma in 1930 and the commodities information field with the acquisition in 1953 of what would become McGraw Hill’s Platts brand. In 1966, McGraw-Hill acquired Standard & Poor’s, which itself was formed in 1941 with the merger of the Standard Statistics Company and Poor’s Publishing Company.

Expansion continued during the rest of the 20th century and into the 21st with multiple acquisitions and joint ventures. In 1970, the company and India’s Tata formed the Tata McGraw-Hill Publishing Company, and in 1989 the Macmillan/McGraw-Hill School Publishing Company joint venture was formed to meet the needs of the K-12 market. Opinion research company J. D. Power & Associates, independent since its creation in 1968, was acquired in 2005.

Following the 2012 sale of McGraw-Hill Education to Apollo Global Management LLC, in May 2013 the company changed its name to McGraw Hill Financial.  On April 28, 2016, the company rebranded itself as S&P Global Inc. and began trading under the ticker symbol SPGI.

S&P Global’s Dividend and Stock Split History

McGraw Hill Financial Dividend Growth

S&P Global increased dividends at an average rate of 7.6% from 1995 – 2014.

S&P Global started increasing dividends in 1974 and met the Dividend Aristocrat criteria of 25 consecutive years of increasing regular dividend payments in 1998.  S&P Global has traditionally announced dividend increases in the second half of January with the stock going ex-dividend in the second half of February.  Based on past history, S&P Global will announce their 45th annual dividend increase at the end of January 2016. The company has paid dividends annually since 1937.

S&P Global’s annual dividend growth has fluctuated from year-to-year, with increases ranging from a 2.3% increase during the depths of The Great Recession in 2008 – 2009, to increases in the 10 – 12% range from 2004 – 2007. The company’s 5-year compounded annual dividend growth rate (CADGR) has been a below-average 5.9%, while the 10-year CADGR – reflecting the double-digit growth rate in 2004 – 2007 – is slightly higher at 7.2%. Since 1995, S&P Global’s CADGR is 7.6%.

In the last 20 years, S&P Global has split its stock 3 times, each time 2-for-1: in April 1996, March 1999 and, most recently in May 2005. Prior to this, McGraw Hill split its stock 5 times: 2-for-1 in August 1953, 3-for-1 in August 1956 and March 1961, and 2-for-1 in July 1967 and June 1983.  You’d now have 4 shares of S&P Global stock for each share purchased when the company qualified as a Dividend Aristocrat in 1997.

Your investment in S&P Global from mid-2009 to mid-2014 would have grown from about $25.52 to about $81.43 – a compounded rate of 26.1% over that time, not including the effects of reinvested dividends. This significantly beat the 14.3% return of the S&P 500 over that same period.

S&P Global’s Direct Purchase and Dividend Reinvestment Plans

S&P Global has both direct purchase and dividend reinvestment plans. Investors interested in participating in either of these plans can find information at ComputerShare’s Investment Center website. The dividend reinvestment plan allows you to reinvest dividends in full or in part; you can also choose to have the dividends directly deposited into your checking account.

The minimum investment for non-shareholders is $500, either through a one-time purchase or through 5 monthly purchases of $100 each. The minimum for subsequent investments is $25.

S&P Global covers all of the fees associated with the direct purchase and dividend reinvestment plans, with one exception. As a new participant in the plan, you’ll pay an enrollment fee of $10. (This is a standard fee for all ComputerShare investment plans.) There’s no fee for direct investments, either by check or automatic debit, and for dividend reinvestments.

When you sell your shares in the plan, you’ll pay 10 cents per share plus a transaction fee of $15 for a batch order, or 12 cents per share sold plus a transaction fee of $25 for a market or limit order. If you enter your order directly through a customer representative instead of online, you’ll pay an additional fee of $15.

Helpful Links

S&P Global’s Investor Relations Website

Current quote and financial summary for S&P Global Inc. (finviz.com)

Information on the direct purchase and dividend reinvestment plans for SPGI

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.

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