S&P Global's (SPGI) Unit Inks Partnership Deal With Axioma

S&P Global Inc.’s (NYSE:SPGI) division, S&P Dow Jones Indices ("S&P DJI") yesterday announced that it has inked a deal to collaborate with Axioma, a provider of enterprise market risk and portfolio analytics solutions.

The collaboration will see the integration of S&P DJI's global brand recognition and capabilities in indices (serving institutions and intermediaries) with Axioma's robust analytical tool kit and expertise.

So far this year, shares of S&P Global have gained 6.3%, outperforming the 1.9% rise of the Zacks S&P 500 composite.

Creation of Optimized Factor-based Strategy Indices in Focus

The tie-up is expected to produce Axioma-powered S&P DJI branded indices. These indices will be designed to deliver optimized single- and multi-factor solutions that advance the forefront of smart beta, ESG and related investment themes.

According to Jamie Farmer, Chief Commercial Officer, S&P Dow Jones Indices, "This collaboration will accelerate the pace of innovation to deliver transparent, strategic factor indices that are designed to meet the increasing demand for benchmarks that encapsulate quantitative investment methodologies."

Bottom Line

By leveraging Axioma’s systematic portfolio-construction capabilities and risk analytics, S&P DJI will be expanding its factor index offering, which, in turn, should benefit its top line.

In the last reported quarter, S&P DJI’s revenues improved 10% year over year, courtesy of growth in asset-linked fees and revenues associated with data and custom subscriptions. The segment contributed around 13% to S&P Global’s total revenues in third-quarter 2018.

Zacks Rank & Stocks to Consider

Currently, S&P Global is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the broader Business Services sector include Paychex, Inc. (NASDAQ:PAYX) , Genpact Ltd. (NYSE:G) and WEX Inc. (NYSE:WEX) , each carrying a Zacks Rank #2 (Buy). The long-term expected EPS (three to five years) growth rate for Paychex, Genpact and WEX is 8.5%, 10% and 15%, respectively.

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