S&P Global
Tollbooths on global finance with compounding, asset-light cash flows
S&P Global is one of the world’s most advantaged information infrastructure companies. Across ratings, indices, commodity benchmarks, and financial data workflows, it operates critical tollbooths that customers embed deeply in investment, financing, trading, and risk processes.
Trailing-twelve-month revenue is about 14.7 billion using Q3 2024, Q4 2024, Q1 2025, and Q2 2025 results, and trailing free cash flow sums to roughly 5.1 billion by adding quarterly FCF disclosed in those same periods, reflecting a robust near-35 percent FCF margin.
The moat is reinforced by regulatory status and reputation in credit ratings, powerful network and brand effects in S&P Dow Jones Indices, and high switching costs across Market Intelligence and Commodity Insights.
Portfolio simplification continues with a planned Mobility separation and the pending OSTTRA JV divestiture, while buybacks and a 52-year dividend increase streak indicate disciplined capital return.
Balance sheet strength, low capex needs, and recurring subscription and asset-linked fees drive resilience, though the Ratings cycle and regulation remain key variables.
With the U.S. 10-year yield around 4.1 to 4.2 percent as of early October 2025, we anchor valuation to high-quality, asset-light cash compounding and propose a fair 28x TTM FCF multiple, translating to an estimated per-share fair value near 465 to 470.
Does S&P Global have a strong competitive moat?
S&P Global benefits from multiple, mutually reinforcing moats. In Ratings, the NRSRO regime, decades of performance, and issuer and investor reliance create formidable regulatory and reputational barriers.
In Indices, the S&P 500 and related benchmarks confer brand and network effects that translate into asset-linked fees and long-term licensing contracts embeddeding the firm in trillions of passive and structured assets.
Market Intelligence and Commodity Insights enjoy high switching costs as data, analytics, and workflows become mission-critical and integrated into clients’ systems. Efficient scale and global distribution lower unit costs over time.
Moat erosion risks include regulatory actions against rating agencies, fee pressures in indices or data, disintermediation by alternative data or AI, and custom or direct indexing encroachment.
The 2024 10-K outlines the regulatory backdrop and recent compliance settlements, while quarterly disclosures show recurring subscription and asset-linked revenue growth supporting durability.
Does S&P Global have pricing power in its industry?
Pricing power is strong. Ratings and Indices carry substantial economic value relative to customer outcomes, enabling steady price increases, while data platforms typically reprice mid-to-high single digits annually.
Company-level margins remain elite: in Q2 2025 GAAP operating margin was 41.3 percent and adjusted 51.4 percent; in Q1 2025 GAAP was 41.8 percent and adjusted 50.8 percent. Such margins, alongside subscription growth and asset-linked fees, evidence pricing power across segments.
The ETF AUM tied to SPDJI indices exceeded 4 trillion in Q1 2025, supporting asset-linked fee scalability. Risks include cyclical issuance mix in Ratings and potential fee compression in commoditized datasets, but mix and embeddedness mitigate these.
How predictable is S&P Global's business?
The business blends recurring subscriptions and licensing with some cyclicality in debt issuance and market levels. 2025 guidance calls for 5 to 7 percent revenue growth with adjusted operating margin near 49 percent.
Subscription revenue rose 7 percent y/y in both Q1 and Q2 2025. While issuance can swing Ratings, multi-segment diversification and Indices’ long contracts smooth results. The large recurring base across Market Intelligence and Commodity Insights enhances visibility.
Predictability risk stems from capital market conditions, assets linked to indices, and macro sensitivity, but overall cash generation has shown consistency through cycles.
Is S&P Global financially strong?
Balance sheet and cash flow are excellent. As of June 30, 2025, long-term debt was about 11.4 billion, total debt 11.4 billion, and cash and equivalents about 1.85 billion.
TTM free cash flow is roughly 5.1 billion, capex guidance is only 180 to 190 million for 2025, and interest expense guidance is about 305 to 315 million, implying strong coverage and rapid deleveraging capacity if desired.
The company also maintains a 2.0 billion CP program backed by a 2.0 billion revolving credit facility that matures in 2029. These metrics provide ample resilience across macro scenarios.
How effective is S&P Global's capital allocation strategy?
Capital allocation has been disciplined and shareholder-friendly. Management targets returning about 85 percent of adjusted FCF via dividends and repurchases. In H1 2025, the company used approximately 1.3 billion for buybacks, including ASRs, and increased the quarterly dividend 5.5 percent to 0.96, marking 52 consecutive annual increases.
Strategic focus continues: a planned separation of Mobility into a standalone public company and a pending sale of the OSTTRA JV (total consideration 3.1 billion split with CME) streamline the portfolio around core franchises. The 2024 10-K details a long history of capital returns.
One caution: repurchases have occurred at rich multiples, so pacing buybacks against intrinsic value remains important.
Does S&P Global have high-quality management?
Leadership quality is high. Martina L. Cheung became CEO on November 1, 2024 after leading Ratings and Market Intelligence and serving as Chief Strategy Officer.
Eric Aboaf, a seasoned CFO formerly at State Street and Citizens, joined as CFO in 2025. This team combines deep operating and capital allocation experience with a record of portfolio shaping and integration, including IHS Markit. Governance and disclosure are strong.
Execution on the Mobility separation and OSTTRA divestiture will further evidence capital allocation discipline.
Is S&P Global a quality company?
S&P Global is an excellent quality company with a quality score of 92/100
- Multiple durable moats: regulatory license and credibility in Ratings, network effects and brand in Indices, and high switching costs in data workflows
- Highly cash generative model: TTM FCF ≈ 5.1 billion on ≈ 14.7 billion of revenue; capex guidance only 180 to 190 million for 2025
- Portfolio focus: planned Mobility spin-off and OSTTRA sale sharpen core while maintaining 85 percent of adjusted FCF returned to shareholders
- Financial strength: long-term debt about 11.4 billion vs cash ~1.85 billion and multi-billion FCF provide ample coverage and flexibility
- Quality at a price: superb business merits a premium, but we prefer building exposure at 23x to 26x TTM FCF to incorporate a margin of safety
What is the fair value of S&P Global stock?
Is S&P Global a good investment at $543?
The following analysis is provided for informational and educational purposes only. It does not constitute financial advice, investment advice, or a recommendation to buy or sell any security. The opinions expressed are based on publicly available information and historical data. Beanvest and its contributors may hold positions in the securities mentioned. Investors should conduct their own due diligence or consult a licensed financial advisor before making any investment decision.