DUN & BRADSTREET CORP. $117 - New York symbol DNB

DUN & BRADSTREET CORP. $117 (New York symbol DNB; Conservative Growth Portfolio, Finance sector; Shares outstanding: 36.3 million; Market cap: $4.2 billion; Price-to-sales ratio: 2.7; Dividend yield: 1.5%; TSINetwork Rating: Average; www.dnb.com) provides credit reports on over 230 million companies. Its clients use this information to make lending and buying decisions.

Credit reports supply two thirds of Dun & Bradstreet’s revenue. The remaining third comes from other information products, including software that helps businesses manage websites and customer data.

In the quarter ended June 30, 2014, Dun & Bradstreet’s revenue rose 1.8%, to $393.0 million from $386.0 million a year earlier. Stronger demand for its credit reports and other products in North America (72% of total revenue) and Europe (16%) offset weaker sales in Asia (12%).

Earnings fell 10.8%, to $54.4 million from $61.0 million, as the company spent more on product development and hired additional salespeople. It also bought back $60.0 million worth of shares. Due to fewer shares outstanding, earnings per share fell 3.9%, to $1.47 from $1.53.

Dun & Bradstreet’s revenue and earnings should improve in 2015, when it launches a new version of its DNBi service, which provides real-time access to its vast credit report database. Right now, DNBi accounts for about 25% of Dun & Bradstreet’s total revenue. The company can easily afford to keep investing in new products. Its long-term debt of $1.6 billion is a manageable 38% of its market cap. It also holds cash of $285.9 million, or $7.85 a share. Dun & Bradstreet will probably earn $7.56 a share in 2014, and the stock trades at a moderate 15.5 times that estimate. The $1.76 dividend yields 1.5%.

Dun & Bradstreet is a buy.

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