Shares of IHS Markit Ltd. (NASDAQ:INFO) have surged 12.8% in the past year, outperforming the 8% rally of the Zacks S&P 500 Composite.
With expected long-term earnings per share growth rate of 10.7% and a market cap of $22 billion, IHS Markit seems is a stock that investors should retain in their portfolio for now.
What Bodes Well for IHS Markit?
IHS Markit’s offerings are well established across multiple industries and geographies. This enables the company to build strong customer relations over time. It prioritizes investments toward automotive, energy and financial services to improve offerings.
IHS Markit’s business model ensures solid recurring revenue generation capacity, low capital requirement, operational efficiency and financial discipline. The company’s depth and breadth of information and analytics is a key competitive differentiator.
Acquisitions are helping the company to expand offerings and strengthen international footprint. IHS Markit made three acquisitions in 2018 — Ipreo, DeriveXperts and PetroChem Wire. While DeriveXperts enhances the company’s derivatives data and valuations products, PetroChem Wire complements its OPIS product offerings. Ipreo is aimed at boosting the Financial services segment.
IHS Markit Ltd. Revenue (TTM)
Wrapping up
Although IHS Markit is riding on growth prospects, it is not free from overhangs. The company experiences significant acquisition-related costs. Moreover, costs might escalate further as the company continues to invest in automotive, energy and financial services. Nevertheless, we believe that solid recurring revenue generation capacity, strong global customer base and acquisitions bode well for the company.
Zacks Rank and Key Picks
Currently, IHS Markit has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Business Services sector are Copart (NASDAQ:CPRT) , Booz Allen Hamilton (NYSE:BAH) and Automatic Data Processing (NASDAQ:ADP) , each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term expected EPS (three to five years) growth rate for Copart, Booz Allen and Automatic Data Processing is 20%, 14.6% and 13%, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
IHS Markit Ltd. (INFO): Free Stock Analysis Report
Copart, Inc. (CPRT): Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report
Booz Allen Hamilton Holding Corporation (BAH): Free Stock Analysis Report
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