McGraw-Hill
New York symbol MHP, has three main operations: financial information under the Standard & Poor's brand; school textbooks; and media (magazine publishing and TV stations).
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific advice, in this case showing you how we judge winning stock picks. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into …read more »
MCGRAW-HILL COMPANIES INC. $42 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 293.4 million; Market cap: $12.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.4%; TSINetwork Rating: Average; www.mcgraw-hill.com) announced in September 2011 that it will split into two separate, publicly traded companies.
One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business …read more »
The three companies below aim to complete corporate breakups in 2012. Breakups generally help unlock hidden value and lead to above-average results in the years after the split. (See two good examples of strong post-split performance — Moody’s and Dun & Bradstreet — also in this issue). Moreover, the new, smaller companies could become attractive takeover candidates.
KRAFT FOODS INC. $36 …read more »
McGraw-Hill Companies Inc., New York symbol MHP, rose 17% the week of September 12 after it announced that it will split into two separate, publicly traded companies.
One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, which provides credit ratings on bonds, and McGraw-Hill’s J.D. Power market-research firm. …read more »
MCGRAW-HILL COMPANIES INC. $43 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 301.3 million; Market cap: $13.0 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.3%; TSINetwork Rating: Average; www.mcgraw-hill.com) plans to split into two separate, publicly traded companies.
One of these new firms, McGraw-Hill Markets, will sell a variety of financial-information products. This business will include Standard & Poor’s, …read more »
Right now, the U.S. credit-rating industry is dominated by three firms: Standard & Poor’s (which is owned by McGraw-Hill, below), Moody’s and Fitch. However, Standard & Poor’s recent downgrade of U.S. Treasury bonds has drawn new attention to the entire industry. This increased scrutiny makes it more likely that regulators will open up the industry to more competition. Regulators could …read more »
MCGRAW-HILL COMPANIES INC. $38 (New York symbol MHP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 307.0 million; Market cap: $11.7 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.6%; TSINetwork Rating: Average; www.mcgraw-hill.com) gets 70% of its earnings and 45% of its revenue from its Standard & Poor’s division, which provides financial information, including credit ratings on bonds. The company also publishes …read more »
New regulations in the wake of the financial crisis will push up costs for these three leading credit-rating providers. However, they face little competition, and they continue to benefit from falling computer costs and the shift to electronic document delivery. These savings are also letting them raise their dividends.
MCGRAW-HILL COMPANIES INC. $38 (New York symbol MHP; Conservative Growth Portfolio, …read more »
Under the new financial-reform law, the Securities and Exchange Commission will develop rules to prevent conflicts of interest in the credit rating industry. The law also creates new standards for credit analysts, including passing qualifying examinations.
The new law will raise these three rating providers’ costs. However, all three have improved the quality of their ratings since the 2007/2008 financial crisis. …read more »
INVACARE CORP. $25 (New York symbol IVC; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 32.3 million; Market cap: $807.5 million; Price-to-sales ratio: 0.5; Dividend yield: 0.2%; WSSF Rating: Average) makes wheelchairs, motorized scooters and other mobility and home-care products.
The company may have to pay $12 million to $14 million a year in new taxes. That’s because the U.S. Senate recently …read more »
