We chose Thomson Reuters as your #1 Conservative Buy for 2025 for several reasons. Those include its high share of the legal and tax information markets and the company’s strong balance sheet. Its long-standing commitment to reward investors with annual dividend increases and share buybacks adds to its appeal.
Note that Thomson Reuters, as a provider of electronic data services, has little risk to tariffs. In fact, the new tariffs should spur even greater demand for its information products from businesses seeking to comply with the new regulations.
Meanwhile, the stock trades at 52.1 times the company’s forward earnings forecast. This is much higher than most of our recommendations, but we’re confident the company’s unique positioning at the intersection of specialize information and AI will continue to outperform the market: it’s currently hitting new all-time highs.
THOMSON REUTERS CORP. (Toronto symbol TRI; www.thomsonreuters.com) sells specialized information and software to the legal, tax and accounting fields. It also owns the Reuters news service.
Thomson is a #1 Conservative Buy for 2025.
Thomson continues to benefit from the 2018 sale of its financial data business (now called Refinitiv) to private equity firm Blackstone Group. In 2021, the partners merged that business with the London Stock Exchange (LSE). The company has since sold all of its LSE shares for $7.3 billion and used some of that cash to buy back its own shares (all amounts except share price and market cap in U.S. dollars).
Thomson now has five main businesses: Legal Professionals (37% of revenue in the latest quarter, 40% of earnings) sells information to law firms, including the Westlaw legal database; Corporate Clients (28%, 25%) sells information products to multinational firms that require a mix of legal, tax and other products; Tax and Accounting Professionals (19%, 25%) sells information products to accounting and auditing firms; Reuters News (10%, 5%) provides general and financial news and information to a wide variety of global media firms; and Global Print (6%, 5%) provides printed legal and tax information.
Overall, the Americas supply 80% of Thomson’s revenue, followed by Europe (17%) and Asia (3%).
In the quarter ended March 31, 2025, revenue rose 0.8%, to $1.90 billion from $1.89 billion a year earlier. If you factor out businesses that Thomson bought and sold, as well as currency rates, revenue improved 6% in the latest quarter.
The company is also doing a good job signing up more subscribers and deepening its relationship with existing ones. In the quarter, recurring revenue rose 9%, and it now accounts for 76% of total revenue.
Overall earnings before unusual items rose 0.9% in the quarter, to $1.12 a share (or a total of $506 million) from $1.11 a share (or $503 million).
To fuel its long-term growth, Thomson is investing heavily in artificial intelligence (AI) technology it can incorporate into its data services.
In 2024, it spent over $200 million its own AI tools. Those include CoCounsel, which uses generative AI (similar to the ChatGPT chatbot) to help the company’s legal, accounting and tax clients search databases and analyze documents much faster than current technologies.
Thomson also continues to make acquisitions that enhance its market share. Those include its $800 million purchase of Pagero Group AB, a Swedish firm that specializes in electronic invoicing services. That helps its clients comply with tax reporting requirements in various countries.
The company also recently paid $600 million for cPaperless, LLC, which operates as SafeSend. Based in Michigan, this business makes cloud-based software that helps tax and accounting firms speed up and improve the accuracy of the tax returns they prepare for their clients.
At the same time, Thomson is selling its less-important businesses. It recently sold FindLaw for $410 million. That business, which provides online legal information and resources such as legal news, blogs, and state and federal laws, has lagged the growth of the company’s other legal information services.
Thomson Reuters’ low debt level cuts your risk
The company’s strong balance sheet supports its growth plans. As of March 31, 2025, long-term debt was $1.84 billion, or just 2% of market cap. It also held $1.37 billion cash.
The company plans to return at least 75% of its annual free cash flow (regular cash flow less capital expenditures) to shareholders in the form of dividends and share repurchases. Free cash flow will probably rise about 6% in 2025 to $1.9 billion.
Under that policy, Thomson raised your quarterly dividend by 10.2% with the March 2025 payment. The new annual rate of $2.38 yields 1.2%; based on that rate, aggregate dividend payments will total roughly $1.1 billion in 2025. Thomson has now increased the annual dividend each year for the past 32 years.
Thanks to the launch of new products, Thomson expects its revenue (excluding acquisitions) will rise between 7.0% and 7.5% in 2025. Its earnings should also rise about 2% to $3.86 a share, and the stock trades at 52.1 times that forecast. While that’s a high multiple, it’s still reasonable in light of Thomson’s strong brands, high market share and recurring revenue. What’s more, as a largely U.S.-based provider of electronic data, it has little exposure to tariffs.
Recommendation in The Successful Investor: Thomson Reuters Corp. is a buy.
